Response to Charge 16
- The defendant denied the charges against him in this charge.
Charge 16 - Evidence
The Prosecution Case
- The prosecution's evidence in this charge is the convictions for bribery and theft by a public servant, as well as the cash deposits into the defendants' bank accounts, as presented in Appendix B to the indictment.
The Haganah Affair
The Defendant's Testimony
Main Investigation (Transcript of January 23, 2023)
- The defendant denied what was attributed to him in this indictment. He did not receive bribes in cash or other considerations. These were money from rent and the sale of a car, and he had no intention of hiding cash (p. 529). If he wanted to hide the cash, he would not have deposited it in the account (p. 535). He also stated that he did not keep cash in his home (p. 536).
- In his testimony, the defendant referred to cash deposits made in the bank accounts in 2017 and 2018. His testimony in this regard was brought in the framework of indictment 15 above. I will briefly mention that with regard to the deposits in 2017, the defendant stated that the source of the funds came from the sale of his mother's apartment abroad, the sale of household appliances, a gift received by the defendant, the sale of earrings, the sale of a car, the sale of his mother's Amidar apartment, and the sale of a clock (pp. 533-536).
With regard to the cash deposits in 2018, he noted that approximately NIS 55,000 of the cash amount received for the sale of the vehicle in 2016 was deposited in 2018 (p. 535).
Charge 16 - The accuser's summaries
- The accuser claimed that she had proven beyond a reasonable doubt that in addition to the specific money laundering in Charge 4, the defendant also committed money laundering offenses of mixing the bribe money given to the defendant in cash together with the cash from the rent in the hotel, and depositing it in the bank accounts under his management and control, in a total amount of NIS 446, 410.
- The defendant took bribes in cash (as part of charges Nos. 1-5 and 14) in a cumulative sum of NIS 277,370 (an amount that does not include bribes in the "favors" that the defendant received). The defendant also received, between the years 2017-2018, a cumulative sum of money, in cash, from the rental of the motel. According to the accuser, these sums of cash from the bribe money and the unreported income were all mixed together. According to section 1 of the Prohibition of Money Laundering Law, the act of mixing is defined as an "action in property" – a mixing of prohibited property with other property, even if it is not prohibited property. The mixing of prohibited property with legitimate property, which constitutes an "action" under section 1 of the law, satisfies the factual basis required for the formulation of an offense of money laundering under section 3.
- In the next stage, after the mixing, the defendant deposited the cash in the banks between the years 2017-2018, in a cumulative amount of NIS 410,446. The financial system was unable to monitor the bribe money from all the cash deposited, and thus the banking system could not separate and classify the source of the money that was mixed (rent or bribe).
- These circumstances indicate the defendant's goal of concealing or obscuring the source of this property in order to exploit the fruits of the original offense, and at least his awareness that his actions are liable to lead to this result as a possible imminent possibility. This fulfills the mental element required for a conviction.
Charge 16 - Defense Summaries
- The defense denied what was attributed to the defendant. It was argued that the accuser did not present a professional opinion to prove the allegation on the economic level, and therefore she cannot demand a conviction without the necessary basis.
- The alleged sum of NIS 446,410 is hundreds of thousands of NIS higher than the sum agreed upon in the civil proceeding.
Charge 16 - Hearing
- Money laundering is the assimilation of property originating from criminal activity, with property of a legal and kosher nature, while obscuring the illegal origin of the prohibited property, while the goal of money launderers is to "turn black money into white money" (Civil Appeal 9796/03 Shem Tov v. State of Israel, IsrSC 59(5) 397, 405). The methods of money laundering are many and varied, but usually involve exploitation of the financial system and its "contamination" with funds originating from the commission of an offense (Criminal Appeal 6532/17 State of Israel v. Chasdei David to the Bukharan Community (April 8, 2018).
- Regarding the elements of the offense of money laundering under section 3(a) of the Law, see above the hearing in the framework of indictment 4. I will briefly mention that the factual element of the offense is an action in "prohibited property". The mental element is an awareness that the property in which the action is carried out is prohibited property, as well as an intention to conceal the prohibited property so that future use of this property will be possible.
- The original offenses of bribery and theft by a public servant were proven above in Charges 1-12 and 14 (the defendant is only partially acquitted of Charge 4 and fully acquitted of Charge 13). The funds derived from these offenses are "prohibited property". Charge No. 16 concerned only the cash money originating from these offenses – NIS 207,370 (taking into account the partial acquittal of the defendant from Charge No. 4 in relation to the sum of NIS 70,000).
- With regard to the unreported rent, it should be noted that the first addendum to the Prohibition of Money Laundering Law, which lists the source offenses, does relate in section 17b to an offense under section 220 of the Income Tax Ordinance, but only if the offense contained aggravating circumstances (such as a very high sum or a connection to a criminal organization) – which do not exist in our case. For this reason, the rent deposited in the bank accounts is not property in which an "offense" was committed under the Prohibition of Money Laundering Law, and it is not "prohibited property" in accordance with section 3(a) of the Law. However, in accordance with Section 1 of the Prohibition of Money Laundering Law, mixing "prohibited property" with property that does not constitute "prohibited property" constitutes an action on the property.
- There is no dispute that in the years 2017-2018, a total of NIS 446,410 in cash was deposited in the defendant's bank accounts. Was the cash received in the original offenses mixed and deposited in the framework of these deposits? Since these are cash funds and taking into account that the defendant made sure that each deposit did not exceed NIS 10,000 (according to him, in order to save commission), it is not possible to point to specific deposits that correspond to the amounts received in the framework of the source offenses. It should be noted that the manner in which the deposits were made (the limit up to NIS 10,000) may indicate an attempt on the part of the defendant to disguise the source of the deposits. In our case, the defendant denied the fact that he committed the source offenses and therefore did not provide a version of the question of what was done with the funds originating from the source offenses. However, the defendant also testified that he did not keep cash in his home, and that the defendants' attempts to prove that all the sums deposited in the bank accounts originated from a legitimate source (the sale of cars, apartments, jewelry, electrical appliances and the receipt of a gift) failed (as I explained above in the course of the hearing in Charge No. 15). In these circumstances, I deem it appropriate to determine that the cash that the defendant received from the original offenses that he committed was mixed and deposited together with other funds in cash in his bank accounts, and thus the defendant committed an action with prohibited property.
- Regarding the mental element, see what was stated in Criminal Appeal 5365/21 Kochman v. State of Israel, paragraph 25 (August 17, 2021):
"Depositing funds originating from illegal activity in a bank account in which funds are valid is 'one of the clearest examples of a case in which the circumstances indicate the existence of an 'intention to conceal'" with the aim of severing the connection "between the prohibited source of the money and its continued legitimate use" (see: Criminal Appeal 8551/11 Selekgi v. State of Israel, para. 42 (August 12, 2012) (hereinafter: the Selchgi case) [published in Nevo]. See also: Criminal Appeal 4456/14 Kellner v. State of Israel, paragraph 96 of the judgment of Judge A. Vogelman (December 29, 2015) [published in Nevo])."