The litigation in the lawsuit itself
- The main investigations of the parties were submitted in affidavits. On behalf of the plaintiff, Mr. Muhammad Daoud ("Daoud"), a project manager at the association since 2012, declared; Jaber; and Mr. Muhammad Ka'adna ("Ka'adna"), who serves as an activity coordinator. On behalf of the defendant, Mr. Pinchas Schatz, the bank's compliance officer ("Schatz"), testified.
- On November 18, 2025, an evidentiary hearing was held in which the declarants were cross-examined. Subsequently, written summaries of arguments were submitted. This is the time to decide.
Discussion and Decision
- After reviewing the parties' summaries, the parties that require a decision are as follows: First, the factual basis underlying the Bank's last decision must be examined, and as a result, the reasonableness and proportionality of its decision. This includes discussing the question of whether the "red flags" that the Bank pointed to were sufficient to lead to the conclusion that there was a real concern of activity related to terrorist financing or money laundering. In the decision on the interim relief, I found that there was insufficient evidence to establish a real concern of participation in the financing of terrorism, but there was a concern of activity relating to money laundering. Therefore, a temporary relief was granted prohibiting the association from accepting cash donations, and it was determined that the relief of termination of activity in the account was disproportionate. Against this background, we must first examine whether there has been a change in the factual basis before us; If the answer is negative, the correctness of the decision must be examined as of the date it was given; Perhaps there is room to give weight to the passage of time.
- The order of the hearing will be as follows: In the first stage, I will list all the "red flags" that the bank relied on in its decision to close the account and will examine, one by one, whether there has been a change in the prima facie factual situation on the basis of which the decision was made in the interim relief. Naturally, in contrast to the temporary relief stage, in which the determinations were prima facie, at this stage I will make final factual and legal findings in the matter of each "red flag".
- I will preface the discussion to a conclusion and say already that there has been no material change in the factual findings that justifies a deviation from my determinations at the interim relief stage. I am also of the opinion that the passage of time since the lawsuit was filed, when the association has shown that it is capable of providing an appropriate response to the fear of money laundering (the fear of terror financing is not sufficiently established), tilts the scales to determine that the closure of the association's bank account today is a disproportionate result that has no place. Contrary to the bank's position, I am of the opinion that there is no room to suffice with examining the reasonableness of its decision in real time, but rather that weight should be given to the manner in which things have developed since the decision was given, including the fact that the account was not closed, and that for a considerable period of time the association was able to conduct itself lawfully, and there is no other claim. Therefore, the claim must be accepted in part in such a way that the temporary relief given will remain in effect as a permanent order. On the other hand, there is no reason to allow the association to resume operating in cash as it requested in its summaries at this time. Here are my reasons in detail:
First Company: The Factual Basis for the "Red Flags" Issue: Is there a reasonable suspicion of involvement in terrorist financing or money laundering that justifies the complete blocking of activity in the Association's account according to the customary standard?
- As is well known, at the stage of interim relief, only prima facie factual basis necessary for a decision is determined, before preliminary proceedings are completed, before the evidence has passed the melting pot of the cross-examination based on the entire evidentiary material, and before the court determines findings of reliability based on impressions of the witnesses. Now, at the stage of the final judgment, the evidentiary basis must be re-examined and factual findings must be determined.
- Nevertheless, our case differs from "regular" civil litigation in the sense that it must examine whether the bank's decision - based on the factual basis laid before it in real time - was found to be reasonable and proportionate or not. Against this background, the hearing of the temporary relief relied on an evidentiary foundation that the association laid before the bank and before the court already at a preliminary stage, in order to try to persuade it to change its decision. This evidentiary basis was particularly broad, and prima facie findings were made in this regard against the background of a relatively broad analysis of the evidence material. My determinations in the interim relief were detailed in detail above. Given the broad evidentiary basis that was already laid out at the time, and the in-depth analysis that was carried out on the basis of it, there is room to examine whether there has been a change in the evidentiary basis that was placed to justify determining that the bank's decision - the one that was given in real time and was found to be prima facie unreasonable at the stage of the temporary relief - will be found to be reasonable retroactively. I will therefore review below the "red flags" listed by the Bank and make a final conclusion with respect to each of them, and then in their aggregate, with respect to two questions: (1) whether there is a reasonable suspicion of involvement in money laundering or terrorist financing; (2) Assuming that the answer to this question is yes, is the decision to block all activity in the account reasonable and proportionate?
- Extensive cash activity in the account without being able to identify the source of the money: At the temporary relief stage, it was determined that the nature of the cash activity, which is impossible to ascertain the identity of the donors and in view of the scope of the activity, tilts the scales to determine that a "red flag" has arisen indicating a reasonable concern of activity involving money laundering. This determination was correct at the time it was given, and it is still true today. Against this background, theorder given allowed the bank to prohibit cash activity in the account.
- The bank argues that the temporary relief did not allay the fear of money laundering because even after the prohibition came into effect, the plaintiff cannot indicate the source of the money deposited in her account and transferred by bank transfers. The examination of the witnesses shows that apart from the name of a donor (and there is no impediment that we are dealing with a pseudonym or the name of a money launderer or terrorist financier), the association does not have information about the source of the money (see in this regard the testimony of Daoud at p. 28, paras. 17-24; Jaber's testimony at p. 56, s. 11 to p. 57, s. 21; p. 58, s. 1-11) according to the bank's approach, The association cannot know whether the funds originate from illegal activity or crime. Qa'adneh was asked about cases in which donors in the mosques stated that they had only cash, and he replied that the donors were directed to the imam of the mosque (Qa'adneh's testimony, p. 31, s. 30, p. 32, s. 18-27). This conduct indicates that the association has found a way to circumvent the prohibition on depositing cash by working to collect donations in cash through the imam of the mosque, which serves as a kind of "conduit" for transferring sums of money in cash. From this, we can conclude, according to the bank, that even its current activity does not allow for clarification of the identity of the donors. The bank referred to three decisions that it claimed supported its claims:
- Civil Case (Mer District') 23921-09-21 Ebenbach v. Bank Leumi Le-Israel BTax Appeal (January 13, 2026): A claim for an injunction instructing the bank to open a bank account in the name of the plaintiff to which her deceased common-law spouse's inheritance funds ($1.2 million) in a bank in Singapore will be transferred. The bank refused to do so on suspicion of money laundering and terrorist financing based on the plaintiff's criminal record (tax offenses and prostitution pimping) for which she served a prison sentence, her inability to prove the source of the money and its connection to the deceased, her lack of involvement in the deceased's business (clothing store), the lack of evidence regarding the store's income or the transfer of the money abroad, her failure to summon relevant witnesses, and her evasive answers and her attempt to hide her criminal record.