Legal Updates

In the case of money laundering offenses, private funds of a corporate employee can be seized for offenses in which the employee and the corporation are accused

November 10, 2022

An indictment was filed against a company that is a car importer and the company's CEO, but also against the company's CFO שד she managed the financial aspects of the company's import activities, was involved in the false entries in the company's documents and gave instructions regarding ordering fake sales invoices, ordering false certificates of origin as well as activity with customs agents in order to submit false import declarations and make false entries in the company's books in order to avoid paying customs duties.

The Supreme Court decided that a temporary order can be issued for the confiscation of the private funds of the CFO. The Israeli Money Laundering Prohibition Law states that, except in exceptional cases, property in which the offense was committed, property that was used to commit the offense, that made it possible to commit it or intended for it, and property that was obtained directly or indirectly, as a reward for the offence or as a result of the commission of the offence, or designated for this purpose, will be confiscated by the State. The purpose of the obligation to confiscate is both a deterrent and to remove from the hands of the criminal property that does not belong to him and is not legally held by him. Already at the beginning of the criminal proceedings, property that is likely to be confiscated may be confiscated by a temporary order if it is reasonable that if there is a conviction, this will result in the confiscation of the property. Property may be confiscated for the value of the property in which the offense was committed regardless of whether the full value of said property ended up in the accused pocket or whether a part of it ended up in someone else's pocket, that is, even if the proceeds of the offense did not reach the accused directly, this will not prevent the confiscation or temporary seizure of one's property. Similarly, in a case in which both the corporation and its employees are accused, even if they are just employees, the private property of such may be confiscated. Thus, the private funds of the CFO in the pension funds and the educational fund may be confiscated by registration.