Speedy trial of cryptocurrency crook couldnt happen in Israel

Sam Bankman-Fried credit: CNBC/Reuters Tali Bogdanovsky
Sam Bankman-Fried credit: CNBC/Reuters Tali Bogdanovsky

Following the conviction of Sam Bankman-Fried, legal experts look at how what takes less than a year in the US can take many years in similar cases in Israel.

This month, US entrepreneur Sam Bankman-Fried, founder of the FTX cryptocurrency exchange, was convicted on seven counts of fraud and money laundering involving billions of dollars, in what was described by the US attorney as "one of the biggest financial frauds in American history." The legal proceedings conducted against him in the US Federal Court in Manhattan lasted 11 months from start to conviction, and it took just one month to hear all the testimonies and for the jury in the Federal Court in Manhattan to find him guilty of the offenses. He will be sentenced in March 2024.

If this is compared to the way legal proceedings are conducted in Israel, the difference is enormous. How can there be differences like these between legal systems, despite the similarity in the way that evidence is presented to the court? We compared this case to a number of similar cases in Israel and highlighted the differences between the legal methods, with the help of three lawyers involved in practicing American law.

Adv. Cliff Felig, a partner at the Meitar law firm and an expert in American law, explains that the right of a defendant to a swift trial is anchored in the US Constitution. There are states in the US that require a trial to start within 60 days and others within just a few months. In Israel, before an indictment is filed, there is a hearing stage for defendants who are not arrested, which can take many months in big cases. In the US this stage does not exist.

Adv. David I. Miller, a partner at the Greenberg Traurig law firm who specializes in white collar crime cases and was a former federal prosecutor in the Southern District of New York where the Bankman-Fried trial took place, points out that the entire trial, from serving the indictment to the conviction, lasted 11 months. In contrast to Israel, an indictment in the US must be approved as a first stage by a 23-member Grand Jury. Miller explains that Grand Jury members must determine whether there is probable cause to believe that a crime has been committed by the defendant, which amounts to "a reasonable basis to believe that the accused committed a crime." At this stage, only the prosecutor’s evidence is presented. Only if this is determined does the case move ahead to the next stage, and may eventually result in a trial. 

Amir Bramly, Aviv Talmor and Daniel Birnbaum, for example

Adv. John Hillebrecht, Partner, Co-Chair, US White Collar Crime, Investigations, and Government Enforcement Group at the DLA Piper law firm and a former Assistant United States Attorney in the US Attorney’s Office for the Southern District of New York, explains that the Grand Jury is presented evidence but independently votes as to whether that evidence provides "probable cause" to believe that a crime has been committed by a specific person. If the Grand Jury does not agree that there is sufficient evidence, the case does not go forward. That being said, in Federal cases, the overwhelming majority of cases presented to a Grand Jury result in an indictment.

In the next stage of a trial, the authorities have an obligation to reveal to the accused and their lawyer the documents upon which the indictment is based. This obligation also exists in Israel, but here it entails a long series of discussions about documents that have not been transferred and confidential evidence, which lasts for many months and sometimes even over a year. This was the case with Amir Bramly, who was convicted of defrauding investors of NIS 340 million. Two years passed from the filing of the indictment in June 2016 until hearing the evidence began. During those two years there were discussions concerning representation, a request to drop the charges and requests for investigative materials.

Aviv Talmor, the founder of algorithmic trading company UTrade, who was convicted of defrauding investors on a smaller scale of NIS 76 million, had preliminary proceedings dealing with the investigation materials that lasted 16 months. Another case that demonstrates the protracted legal proceedings in Israel is the trial of former SodaStream CEO Daniel Birnbaum, in which no witnesses testified at all. He admitted last month, in a plea bargain agreement, to the use of insider information. The first hearing in the case took place a year after it was filed, and the entire first year involved the transfer of investigative materials and preliminary hearings. Almost two years passed without hearing witness testimony, until a settlement was ultimately reached.

One of the reasons for the differences: The pace of hearing witnesses

Back to the US proceedings: Adv. Miller explains that after approval of the indictment by members of the Grand Jury, the next stage is discovery and motion practice, and then there can be a trial conducted in front of a smaller jury, generally including 12 members. They need to decide if the defendant committed the offense beyond reasonable doubt, a higher threshold than in the previous stage. The judge then hands down any punishment.

According to Adv. Hillebrecht, the prosecution calls all the witnesses it believes are of significance. He describes a process which is similar to Israel, in which the parties can agree or stipulate that, if called, a certain witness would testify to X. They can also stipulate certain facts, but by and large the evidence comes in through the testimony of live witnesses and documentary exhibits."

"The Southern District of New York works quickly, more so than other districts," says Adv. Miller, adding that a month to hear the evidence is not necessarily a short time. Adv. Hillebrecht agrees and explains that trials before a small jury can last between two days and three months, depending on the extent of the evidence. One of the reasons for the differences between what happens in the US and Israel is the pace of hearing witnesses. In Israel, witnesses are not heard consecutively; rather, they generally are heard only a few days a month. Even in big and important cases, like in the trial of Prime Minister Benjamin Netanyahu, witness testimony is heard three days a week at most. On the other hand, in the US, the hearing of witness testimony takes place continuously, every day.

Adv. Miller explains that Bankman-Fried's trial was conducted consecutively from Monday to Friday through the trial itself (which lasted a month), except for certain days that the judge canceled. Adv. Felig adds,"Because there is a jury that is taken away from their work, there are hearings five days a week, eight hours a day. In Israel, three days a week is considered an achievement."

Another difference between the two countries lies in the length of time each witness' testimony lasts. The length of the testimony depends on the role of the witness, but in Israel it is customary to allow the parties to question the key witnesses for many days and up to several months. In the US, this does not happen. Adv. Felig explains that most trials are completed within weeks. "The defense has to cross-examine the witnesses immediately after their testimony, and bring their own witnesses after the prosecution finishes. In Israel, it doesn't work like that. We give time to prepare for both sides."

Thus, Bramley's trial lasted four years and four months from the filing of the indictment to the conviction. Talmor's trial was also conducted over four years, including 30 months in which testimonies were heard, until a verdict was given. The trial of Faina Kirschenbaum, the former Deputy Minister of Interior, lasted three and a half years years and involved ten offenses.

These recent cases are actually considered very fast trials in relation to the volume of the investigation materials and the complexity of the charges. In extreme cases, the duration of the trials in Israel can extend over 8-9 years, as in the case of attorney Ronel Fisher, who was accused of multiple bribery cases and other offenses. The trial continues to this day and the defense case has not yet begun.

The differences in the summary phase and handing down the verdict

Another significant difference between the countries is in the summary phase. Adv.Felig explains that in the US, "immediately after the witnesses have presented the evidence, they move on to oral summaries. These can be on the same day for several hours. In Israel, the judges allow written summaries for each party, in a manner that causes delays for several months."

Finally, a difference is found in the way the verdict is handed down. Adv. Hillebrecht explains that, in the US, "the jury retires to deliberate as soon as the evidence is closed, and the judge has instructed them on the law. The verdict takes as long as it takes. It can come the same day or multiple days later. There is typically a verdict form, but the jury only checks a box ("Guilty" or "Not Guilty") to reflect the unanimous verdict".

"A few hours is considered quick," says Adv. Felig. "If it is determined that the accused is not guilty, the state has no right of appeal. If the defendant is convicted, they have the right to appeal."

Published by Globes, Israel business news - en.globes.co.il - on November 15, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

 
Sam Bankman-Fried credit: CNBC/Reuters Tali Bogdanovsky
Sam Bankman-Fried credit: CNBC/Reuters Tali Bogdanovsky
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