The Israeli Police seized ILS 17,000,000 in temporary forfeiture orders against a money laundering suspect and a company under its control that provided credit card clearing services to businesses. The Police refused to release funds of ILS 130,179 to an innocent business even though the funds were received from legitimate transactions.
The Court accepted the motion to release the seized funds and instructed the police to release the funds to the business. The Israeli Money Laundering Prohibition Law enables the confiscation of property that is in the possession, control or account of a defendant or the value of property in which a crime was committed, property that was used to commit the crime, as well as property obtained as a reward for the crime or as a result of its commission. To ensure such confiscation after conviction, the property can be temporarily seized even before the indictment is filed. A third party claiming a proprietary or quasi-proprietary right against confiscation of property belonging to the suspect or the accused may request the release of the seized property. Here, the funds seized by the police are the product of legitimate transactions of the business that are not the property of the suspect or the clearing company, controlled by the suspect, and do not belong to neither of them. These are funds that are held in trust until they are transferred to the business owners. The Police have no authority to seize funds received as a result of legitimate transactions. The Police had to separate the seized funds that were received as a result of legitimate transactions and the ones that are not. Therefore, the Police must release the seized funds to the business.
For full disclosure, the business was represented by attorneys Doron Afik and Yair Aloni of Afik & Co.