Criminal Case (Jerusalem) 54589-02-17 State of Israel v. Oshri Sharon - part 33

The request for quotes from the defendant companies and the arrangement for submitting coordinated bids

124. Below we will present the main facts relating to the coordination arrangement that is the subject of the second indictment: ELTA's request for price proposals, the coordination correspondence between the defendants, and the proposals submitted to ELTA. Additional developments that took place in between, from which the defendants seek to be built, will be discussed below.
125. On September 23, 2009, Mordechai sent a request to a number of suppliers for a detailed price quote for the Indra project (contact to Shahar Movi - N/227; contact to Naveh of Triple C - within the scope of P/288). In the letter, Mordechai noted, inter alia, that the equipment would be offered against equivalent equipment from HP, that the requirements regarding the storage system would be transferred later, and that it was possible to submit NetApp or EMC storage systems (ibid.).
126. On September 29, 2009, Mordechai sent an update to the three companies accused in this indictment - Wei, Harel and Triple C - in which he updated some of the items, including detailing the storage configuration for NetApp (P/155 - addressed to the three companies; see also P/154, where the update request for Naveh from Triple C, p. 1129, paras.  1-20; P/288, where the update request for Shahar Movi was included; in the table that Mordechai attached to the update, it was noted, Among other things, because in relation to the storage systems, it is possible to offer an alternative configuration based on EMC).
127. In between, the defendant companies, or any of them, carried out various actions in connection with the submission of a bid to Balam Indra. We will address these below.  It should be noted at this point that on the part of Wee, in addition to Shahar, Oshri was involved in all matters relating to the submission of Wee's proposal, and he gave Shahar various instructions on the matter (e.g., P/230, P/288).
128. On October 20, 2009, Shachar submitted to Mordechai Wee's offer to Balam Indra, in the sum of approximately $330,000 (P/233). A copy of the proposal was sent simultaneously to Oshri (ibid., p.  3163, paras.  2-5).  On the same day, Naveh replied in response to Mordechai's question that Triple C would soon submit its proposal (P/156).
129. At the same time, on October 20, 2009, apparently a few minutes after Shahar sent Mordechai the Wee offer with a copy to Oshri, Shahar sent Zeiger and Gilad Maharel - with a hidden copy (BCC) to Oshri - an e-mail message titled "Prices for Indra". In the body of the message, he wrote: "Friends, following the summary of the prices for Elta." An Excel table was attached to the e-mail message detailing the components of the project's contents, prices for each component, and the total price (of Harel) to Elta - $379,015 (P/289, underline added, P/564 as well as Exhibit 957 at para.  2, p.  66 of file P/562).  As we shall see below, Shahar testified that Gilad was supposed to submit the table, as is, as it is, as Harel's proposal to Elta (p.  2675, paras.  17-18).
130. Gilad replied in an email to Shachar and Zieger in which he asked Shachar, "Why doesn't Yaakov write?" referring to Yaakov Naveh of Triple C (P/377). To this, Shachar replied, shortly afterwards, in an e-mail to Naveh, on which Zeiger and Gilad also write: "Right, Yaakov, attached the prices of Harel to Indra," while attaching the aforementioned excel table with the prices of Harel (P/17, also filed as P/290, P/378, P/461).
131. On October 20, 2009, at a later hour, Gilad asked Shahar to send him the prices that Shahar had sent to Naveh (P/295, P/162), i.e., the prices that Triple C was supposed to offer to Elta (in his testimony, Shachar confirmed what he said in his interrogation with the Authority that Gilad asked for this so that the prices of Harel and Triple C for Elta would not be identical, p. 2680, paras.  8-13).
132. The next day, on October 21, 2009, Shahar sent Gilad and Naveh an e-mail titled "Prices for Indra", to which an updated and orderly Excel table was attached in which the components of the project's contents and the prices that Harel and Triple C must submit in their bid to ELTA were detailed. In the body of the message he wrote: "Yaakov and Gilad, attached are the prices of each of them for Indra, I added the column of CCC, the gap between us - I am 11% cheaper than Harel's offer, Gilad will refer to the above table since in the previous one there are no prices of gigs" (P/13).  In the attached table, it was noted that the price of Harel to Elta is $377,727 and the price of Triple C to Elta is $385,530.  As stated in the body of the email, Shahar noted that Wee's offer would be 11% cheaper than Harel's offer - in a manner that roughly corresponds to the offer of $330,000 - and therefore Wee's offer would be the cheapest of the offers (in his testimony, Shahar confirmed that Gilad and Naveh were supposed to send Elta offers with the prices he mentioned in the table, p.  2681, paras.  7-18).
133. On the same day, 21 October 2009, Naveh sent Shahar and Gilad the table after making slight changes to it so that the Triple C offer would be ILS 368,675, that is, it would be slightly cheaper than Harel's offer but still more expensive than Wie's offer (P/14).
134. Later that day, 21 October 2009, Gilad submitted Harel's proposal to Elta, in an e-mail message he sent to Mordechai (P/157). The proposal was made on Harel's logo page.  The total price of the offer was $372,467, slightly lower than the price mentioned by Shahar, but in a way that did not change the fact that the Wii offer would remain the cheapest offer.  At the same time, Gilad sent Shahar the proposal he had submitted to Elta (P/372) and the next morning Shachar forwarded to Oshri the email he had received from Gilad and Harel's offer to Elta that was attached to it (P/291).
135. On October 25, 2009, Naveh submitted an offer on behalf of Triple C to Elta, in an e-mail message he sent to Mordechai (P/4, P/154). This proposal by Triple C was based on storage systems made by EMC and not by NetApp.  This is in contrast to the details that Shachar sent to Gilad and Naveh (P/13) and in contrast to the proposal that Naveh had previously sent to Shachar and Gilad (P/14).  The total price of the offer was $320,980, which is also different from the prices mentioned in the correspondence between Shahar, Gilad and Naveh, and ostensibly lower than Wee's offer.  Naveh testified that he may have informed Shachar of the proposal he had submitted (p.  191, paras.  22-25, paras.  14).  Shortly after the Triple C proposal was submitted, a correspondence took place between Shahar and Oshri regarding the Triple C proposal based on a different storage system (P/292, P/293, N/235, N/236), at the end of which Shahar reported that Mordechai understood that the alternative storage system proposed by Triple C was apparently incompatible with what was required (P/109, N/237).  The defense's arguments in connection with the aforesaid will be addressed separately.
136. On October 27, 2009, Shachar submitted to Mordechai an updated offer from Wei to Elta following certain technical comments made by Mordechai. This proposal amounted to USD 342,904 (P/158).
137. A few minutes later, on October 27, 2009, Shachar sent Gilad an updated version of the proposal that Harel must submit to Elta, in accordance with the aforementioned technical comments. Shahar amended Harel's offer, which was made on Harel's logo page and on top of the offer that Gilad had forwarded to him a few days earlier (P/372) and changed the total price of Harel's offer to $397,669 (P/163).  On October 29, 2009, Gilad submitted to Mordechai Harel's updated offer to Elta in the sum of $397,669 in a manner that exactly corresponds to what Shachar sent him (P/159, P/463).
138. On October 27, 2009, Naveh submitted to Mordechai an updated offer of Triple C to Elta, which this time was based on NetApp storage systems and not on EMC, as was the case with Triple C's previous offer (P/15). Naveh testified that he apparently did so after Mordechai approached him and asked him for a proposal based on NetApp (p.  191, paras.  7-11, paras.  26-29).  Triple C's offer was in the sum of ILS 358,752, that is, more expensive than Wee's offer, and the price that Shachar stated in the email he sent to Gilad and Naveh as the price at which Wee would offer its offer (P/13).  On October 29, 2009, Naveh sent Shahar the proposal he had submitted to Mordechai (P/15).  A few minutes later, Shachar forwarded Oshri the email he had received from Naveh to which a Triple C offer was attached (P/15, P/294).  A short time later, Naveh sent Mordechai an amended offer in which he corrected a technical error without changing the price of the bid (P/16) and immediately forwarded the notice and the amended offer to Shachar (P/16).
139. Wei's offer was therefore the cheapest of the proposals submitted by the defendant companies.
140. On November 1, 2009, a meeting was held in Elta, in which Mordechai, Oshri and Shahar participated, inter alia, to conduct negotiations and close the deal. Oshri testified that IBM representatives also participated in the meeting (P/117, N/240, p.  4471, S.  15 - P.  4472, S.  17).  Subsequently, Wie submitted updated price quotes, on the same day, November 1, 2009, in the amount of $322,203 (P/160), and on November 3, 2009, after correcting a calculation error, in the sum of $319,523 (P/161).  At the end of the day, it was Wei who won the project (p.  1151, paras.  2-9, P/164).  After completing the details (N/242), Mordechai instructed on November 14, 2009 to issue a demand for the purchase of a hook (N/108, n/243) and Indra purchased the contents of the equipment from Wei (P/244; see also Mordechai's testimony that Indra chose Wee's offer, which was the lowest offer, p.  1181, paras.  1-3).
141. Shahar testified that the parties agreed "... that in Indra we [We] will work from beginning to end" (with reference to Tel/289, p.  2676, paras.  1-7, where he also confirmed what he said in his interrogation at the Authority that this was "an agreement according to which Wei will work on the project...  Indra", P/557(8), paras.  128-129).  In his testimony, Shachar confirmed that he had sent Gilad and Naveh prices and that they were supposed to submit price quotes to Elta with the prices he had sent them, after Shahar informed them that the price she would offer would be cheaper (with reference to Tel/13, p.  2681, paras.  7-18).  With regard to the offer submitted by Harel later on (P/163), Shahar confirmed in his testimony that he had filled out the offer for Gilad - and in any case also the price - on a page bearing the Harel logo, and that this was the offer that Gilad submitted to Elta shortly afterwards on behalf of Harel (P/159, P/163).  When asked in his testimony if he was fulfilling Harel's offer for Gilad, he replied with a rhetorical question: "Isn't that what we have been doing here all along?"In such a way that it also constitutes an admission of coordinating the price proposals (p.  2685, paras.  7-8).  We must accept these words of Shachar, which were made contrary to the interest and in a manner that is consistent with the evidence and correspondence from real time, and give them full weight (and for other things that Shachar said as if there was no possibility of competition in an attempt to detract from the meaning of the words, we will refer to below).
142. Mordechai testified that he did not know in real time until the interrogation about the correspondence and coordination between the three companies in the proposals they submitted to him (p. 1135, paras.  21-24, p.  1136, paras.  7-13, paras.  16-19).  In his testimony, he said that "I thought I was competing between suppliers and manufacturers...  I didn't know there was any agreement between them..." (p.  1262, paras.  4-7).  Mordechai testified that when he was presented with the correspondence between the companies during his interrogation, he was angry, thinking that it was "irrelevant," that they were "tricksters and thieves" who had made a "combine" on him (p.  1136, s.  21 - p.  1137, s.  1; p.  1138, s.  21 - p.  1139, s.  2; p.  1175, paras.  17-18; p.  1176, paras.  2-5; pp.  1181-3, paras.  5-18; See also his testimony that if he had known about the coordination, he would not have put it on the agenda and would have been involved in the matter of other parties in IAI, p.  1139, paras.  5-10).  Mordechai's testimony on this matter was reliable.  No concrete evidence was presented that could testify otherwise (and even Shachar, who devoted a large part of his answers to what the defense offered him, did not claim that Mordechai knew, p.  3361, paras.  10-12, paras.  6).  The fact that in 2018, many years after the privileged coordination, Mordechai established a business in partnership with Shahar (pp.  1174-1175) does not undermine the conclusion in this matter.  Therefore, and as we shall see below, the defense's arguments, which sought to be based mainly on circumstantial inferences, that Mordechai used Shahar in order to receive fictitious offers from Harel and Triple C (for example, para.  169 of the Wei and Oshri summaries).
143. Interim summary: The evidence paints a clear picture. The defendant companies - Wee, Harel and Triple C - agreed and reached an arrangement whereby Harel and Triple C would submit bids higher than Wee's offer, which would be the one to win Balam Indra.  The parties to the arrangement, other than the companies, were Shahar and Oshri Movi, Gilad and Zeiger from Harel and Naveh from Triple C.  Although most of the correspondence was made at the level of the salespeople, the customer managers - Shahar, Gilad and Naveh - it was proven in the circumstances of the case, and as will be detailed below, that both Oshri and Zeiger were parties to the arrangement, that they were involved, that they knew about the arrangement and agreed to it.

The settlement in Balam Indra as a continuation of the arrangement that is the subject of the first indictment - note

144. In the first indictment settlement, which was made at the beginning of May 2009, or thereabouts (P/1), the three companies - in a meeting in which Shahar, Zeiger, Gilad and Naveh took part - agreed not to compete and to allow any of the companies to win, inter alia, by submitting high bids by the other companies.
145. The arrangement between the parties to coordinate the price quotes in Balam Indra was made from the second half of October 2009, i.e., about 4-5 months after the arrangement in the first charge.
146. The evidence shows that the coordination of the proposals was made by Balam Indra following the settlement of the first indictment:

In the first e-mail in which Shachar sent Zeiger and Gilad from Harel (with a hidden copy to Oshri the prices that Harel should offer to Elta in Balam Indra, he wrote explicitly that he was addressing "further to the summary" (P/289).  The defendants had no real alternative explanation supported by the evidence for another summary that was subsequently coordinated now, other than the required summary that is the subject of the first indictment.