The witness, Mr. Jorgero: Me, the hotel is a new hotel, it's not the same hotel....  I built a new building, it's a completely new building.  So it can't be the old executive order."

61. When asked by the court what happened that year, when the license had not yet been obtained, he replied again that he still did not need to close the business, because the lack of a license stemmed from corruption in the municipality (p. 76, paras.  3-18).
62. To these statements, which include serious allegations regarding corruption between the municipality and Abulafia, and even to telephone threats he received from Abulafia regarding his life and the lives of his family, Defendant 2 repeated again later (see, for example, at p. 77, paras.  7-24).  At that time, he was asked by the court whether he had complained about it to the police, he answered in the affirmative, but said that he did not know and had not checked the status of the handling of the complaint (p.  77, paras.  25-32, p.  78, paras.  1-4).
63. During the testimony, he was asked why he did not file an administrative petition regarding the municipality's refusal to grant a license for the business, but he replied that he did not know that this was necessary and that he would inquire with his legal advisors (p. 76, paras.  19-29).
64. Defendant 2 also stated that in the adjacent building there was a building belonging to Abulafia, where the balcony fell (p. 64, Q.  3-10,26-32, a series of photographs marked N/6).  According to him, the municipality is turning a blind eye to this and to other acts by Abulafia (p.  82, Q.  11-16, p.  86, Q.  6-10).  When the accuser's counsel argued before him that all business licensing offenses on the same street are enforced, he said that he doubted that this was the case.  When he was presented with a list of businesses in respect of which it was claimed that they were in enforcement proceedings, he replied that none of them belonged to Abulafia, and that many of them were active in reality despite the enforcement (P/9, p.  82, Q.  28-33, p.  83, Q.  1-33, p.  84, Q.  1).  When he was presented with Abulafia's conviction for the offense of business licensing, he said that it was a conviction in relation to a small bakery and not a hotel, and reiterated that Abulafia "lubricates" municipal officials and therefore there is no enforcement against him (P/10, p.  84, questions 2-33, p.  85, question 1).
65. Afterwards, the testimony of the architect Roy Amit was heard, "I am a constructor by profession, I am the owner of a planning firm for architects and engineers... in a little over 25 years" (p.  87, paras.  3-6).  Amit claimed that he began handling the business's file only in 2024, about two years after the events that are the subject of the indictment (p.  92, paras.  3-15, p.  93, paras.  2-5).  According to him, he did not delve into what had been done in the business in previous years, but began to "clean up" the problems it had, and to his delight he received cooperation from the business (p.  92, s.  28-33, p.  93, s.  1-7).
66. According to him, when he began to handle the case, he was sure that the license would be received quickly. Indeed, all the permits were given quickly, but in front of the engineering licensing station, he was unable to move forward, "and there we encountered a wall, simply a wall, that's the story here, on some piece of land that is outside the hotel, we were unable to submit the file for a year and two months, I have everything certified" (p.  87, questions 25-27).  Amit elaborated on the procedures taken with the Engineering Licensing Division and the demands that the division raised and did not allow the matter to proceed (p.  87, questions 11-33, p.  88, questions 1-33, p.  89, questions 1-23).  Amit said that after all the processes he went through, he believes that the license is within easy reach within an immediate period of time, but due to the sequence of events and the series of demands that were given, which he described as exceptional, he is afraid to commit to doing so (p.  89, paras.  25-32, p.  90, paras.  1-2).
67. In his cross-examination, Roi Amit claimed that the status of the license submitted to the court was not up to date, and in fact, an online application had since been submitted, which had already matured into a regular application. He did not have the application in question so that he could present it (p.  90, paras.  11-33, p.  91, paras.  1-33).
68. Amit further explained that the status of the license did not remain the same, but changed dramatically. Even if the station of engineering licensing is refused, this does not reflect real progress that has been made in this area (p.  93, paras.  12-32).  When asked why the demolition order that has already been approved has not yet been executed, he replied that the question should be addressed to the owner and not to him (p.  94, paras.  8-27).

The accuser's summaries

69. The accuser in her summaries seeks to convict the defendants of the offenses of operating a business without a license, and defendant 1 also of the offense of failure to comply with an order.
70. According to her, the evidentiary basis laid before the court shows that the business was operated on the date described in the indictment (P/3, and in the absence of heresy on the part of the defendants).
71. The lack of a business license is requested by the accuser to learn from Edelstein. It was emphasized that not only did the business not hold a license, but it also bore substantial refusals, which relate to pending demolition orders, as detailed in the Public Works Industry.  It was emphasized that "these are not technical refusals, but refusals that stemmed from material deficiencies that the defendants were unable to remedy before operating the business.  In fact, this is a legal impasse, not bureaucratic or arbitrary as the defendants tried to present...  Operating the business in this situation is a conscious choice by the defendants to prefer the economic interest over the rule of law" (paragraph 5 of the summaries).
72. According to the accuser, the defendants were well aware of the licensing obligation, as can be seen from the very submission of the applications for a license and even from the testimony of defendant 2. In addition, it was argued that the testimony of defendant 2 strengthened the accuser's evidence regarding the operation of the business, with full awareness of the absence of a license and even with knowledge of the existence of a pending judicial closure order, which was grossly violated.
73. Against this background, it was argued at the end of the summaries that "this is not a technical failure or a one-time stumble, but rather a conscious, systematic and ongoing conduct of the defendants who chose to prefer their private economic interest over the rule of law" (end of p. 5 and beginning of p.  6 of the summaries).
74. As for Amit's testimony, it was argued that it is not at all relevant to the proceeding before us, since Amit was hired only in 2024, long after the date attributed in the indictment.
75. In addition, according to the accuser, the defense's arguments regarding the many efforts made by the defendants to regulate the license and their high investments in the business do not constitute a defense against the attributed offense of operating the business without a license and in contravention of a judicial closure order.
76. With regard to the criminal liability of defendant 2, the accuser referred to section 15 of the Business Licensing Law, which imposes criminal liability for the actions of a corporation also on a person who is an active controlling shareholder and manager of that corporation. In addition, it was argued that the evidence shows the deep and direct involvement of defendant 2, who purchased the property, initiated the renovation, and is the sole authorized signatory of defendant 1.
77. As for the claim that the name of Defendant 2 was mixed by another in the documents submitted to the Licensing Authority without his knowledge, it was argued that it should be rejected because "it is inconceivable that a person of the stature of Defendant 2, who manages a huge group of companies, would not be aware of the documents submitted on his behalf to the Licensing Authority".
78. As for the defense's argument that the business is, in fact, a completely new hotel, and therefore the old order does not apply to it, the accuser sought to dismiss the claim outright, when according to her opinion the judicial order was issued against defendant 1 and against any other person in relation to the specific premises in question. It was argued that the change of ownership of defendant 1 does not reset defendant 1's legal obligations under the order.  Similarly, the claims regarding the renovation of the property or the change in its interior design, and even in the case of large investments, do not supervide a pending order that no one even bothered to ask to delay.  It was argued that the attempt to place the responsibility for the failure to obtain the license on the architect or for the alleged corruption in the municipality does not justify the continued operation of the business without a license.
79. The accuser emphasized that the current proceeding is a criminal proceeding, and that it is not the appropriate venue to clarify the defense's arguments regarding the Authority's decisions to refuse to grant a business license. According to her, the defendants could have filed an administrative petition with the Court for Administrative Affairs, and when they chose not to do so, they should have ceased the business until the license was arranged.
80. As to the allegations regarding the failure to deliver an invitation to deliver a version - it was argued that the accuser acted to summon the defendants according to the updated addresses she had. Even if there was a mistake in the address - and this claim is denied - it was argued that this was a technical defect that did not justify the cancellation of the indictment, especially when the defendants were aware of the lack of a license, and with the passage of time, they continue to operate the business without a lawful license.
81. As for the claims of selective enforcement, it was claimed that these were mere allegations, which were launched into the air without proper support, without an equal group being identified.
82. The accuser noted that the allegations relating to the Zionist motives for the purchase of the business, the enormous financial investment, and more - can be taken into account at most at the stage of pleading for punishment.

Defendants' summaries

83. The defendants submitted their summaries on August 18,2026.
84. The defendants describe in great detail the enormous efforts that have been made to obtain a business license since the business was purchased, in a very poor state and with a closure order hovering over it, and to this very day. It should be noted that in this context I was referred to a series of proceedings that were conducted in the various courts, only about some of which I heard about at the stage of presenting the evidence in this proceeding, and certainly not in the resolution in which the matters were detailed in the summaries.
85. According to the defendants, the accuser's approach, which seeks to focus solely on operating the business without a license on the day of the audit - July 4,2022 - ignores the enormous efforts that were made over the years to regulate the business's license, after defendant 2 purchased it back in 2018.
86. It was argued that the Authority's refusal to issue a business license or at least a temporary permit relied almost entirely on planning barriers encountered in attempts to regulate the business. However, according to the claim, many of the proceedings taken against the business on the engineering level were proven to be superfluous in retrospect - defendant 1's position in the proceedings conducted against her in the Rental Court was accepted in full, the municipality itself retracted a demolition order it had initially issued in relation to certain construction in the business, and of two new orders it issued subsequently, the main one was revoked.  According to the claim, the results of the proceedings show that the defendants worked diligently to arrange the business license, in every way they could have approached the courts; when it was exceptional bureaucratic obstacles that prevented the receipt of the license.
87. It was further argued that the status of the business license submitted in A/2 shows that shortly before July 4,2022, the business had a temporary permit within reach, subject to the regulation of a specific issue; and only a few months later, the demolition orders issued to it became a new obstacle and a significant obstacle on the way to obtaining a license or temporary permit.
88. With regard to the non-compliance of a judicial order attributed only to defendant 1, it was emphasized that the order was issued before the change of ownership. The defendants do not deny its validity, but believe that this requires caution when examining "its scope and the significance of its applicability".  In addition, they note that they did not sit idly by, but acted vigorously, as detailed above, in order to regulate the license.  This, too, according to their view, has implications for the degree of liability.
89. Against this background, the defendants claim that the indictment filed in their case should be dismissed on the grounds of "protection from justice."
90. As an additional reason for the motion to quash the indictment, beyond the alleged regulatory trap, a violation of the defendant's right to a hearing prior to the filing of the indictment was also raised, when it was argued that defendant 2 was never summoned to give his version, since a letter of invitation to deliver a version was sent to an address that is not actually used by him. I was referred to a rabbinic case law that followed this path.  It was argued that this constitutes a violation of the right to a fair trial.
91. It was also argued for selective enforcement. In summary, the argument relies on P/9, which the accuser filed in order to show that proceedings were being taken in that geographical area, and from which the defendants learn about the discretion exercised by the accuser, who in not all cases rushed to file an indictment.  According to the argument, the very fact that other investigation files were returned to supervision or shelved requires an examination of why this was not the state of affairs in the case of the defendants.  This is especially so, taking into account the many efforts and investments in the property, and the claims regarding the regulatory trap that the defendants claim they found themselves in in the present case.
92. I was also referred to a proceeding in B/10 in business licensing case 35346-09-19, which concerned a nearby business of Abulafia, which ended with the conviction of the corporation and the deletion of its officers. According to the claim, insisting on the proceeding in relation to defendant 1 and defendant 2 in the present case, is strict with the defendants here, with the accuser insisting on her demand to enforce its officers, and therefore also indicates a selective enforcement policy.
93. Further, I was referred to Civil Appeal 65541-05-22 Abulafia v. Tel Aviv Local Planning and Building Committee (June 23,2022) (hereinafter: "Abulafia"), where Abulafia was granted a long list of temporary permits for irregular use of business licensing, despite a judicial demolition order pending for years; and also to the municipality's policy, which praised Abulafia when he made repairs to a dangerous building he owned that was required to be repaired due to a collapsed balcony.  This was done without the accuser initiating a series of enforcement measures against him, as she did here.
94. 00In addition, it was argued that the conduct of the current proceeding contradicts the objectives of the business licensing laws. The argument is that the efforts to regulate the business show that defendants who strive to operate the business in a lawful manner above and foremost, that in the concrete case the business did not reflect a danger to the public, and that they should not be subjected to the strict criminal procedure intended to be used against those who try to evade the law.
95. It was argued that the defects enumerated add up together in a way that tilts the scales towards the cancellation of the indictment in relation to the two defendants.
96. Alternatively, I was asked to cancel the indictment that was filed or to acquit Defendant 2 only. It was argued that the flaws in relation to him are more severe, because he was not given the right to give his version before the indictment was filed, and also because the selective enforcement against him is harsher - inconsistent with the cancellation of the indictment against the officer in the Abulafia case.
97. In addition, it was argued that the filing of the indictment against defendant 2 and not other officers lacked an evidentiary basis, as his name was drawn from the application for a business license that is not clear who filed it and why. It emerged that the municipality requires that a person of flesh and blood register in every license application and take responsibility for what is done.  However, according to the claim, this does not replace the evidentiary basis of his role in the business, as opposed to the roles of the other shareholders and directors connected to it.
98. It was explained that defendant 2 owns a company that manages many hotels in Israel and abroad, and does not manage the hotel in question on an ongoing and daily basis.
99. It was also claimed that Defendant 2 took all reasonable measures that he could have taken to avoid committing the offenses and led the investment in the hotel; hired experts; acted to issue a renovation license; kept in touch with the municipality; conducted legal proceedings; and advanced the regularization proceedings on all fronts.

Discussion and Decision

Existence of the Elements of the Offense of Running a Business Without a License

100. The first offense attributed to the two defendants in the indictment is the offense of operating a business without a license, under section 14(a)(1) of the Business Licensing Law. The language of the section states:

"Whoever commits any of the following, shall be liable to imprisonment for 18 months or a fine as stated in section 61(a)(4) of the Penal Law, 5737-1977 (in this law - the Penal Law), and if he is a corporation, he shall be liable to double the said fine: