An Israeli court has agreed to lift a gag order on the name of one of the suspects arrested along with nine others in an unprecedented November raid that targeted suspected investment fraud and money laundering amounting to hundreds of millions of dollars, following a three-month court battle.
Avishai Ziv, 40, was the CEO of the Singulariteam venture capital fund since May 2018 as well as the CEO of Alignment Group, an incubator of blockchain companies that was founded by Moshe Hogeg, CoinTree CEO Uriel Peled, and Bancor project architect Eyal Herzog.
Prior to joining Singulariteam, Ziv had worked at Ernst and Young Israel as a senior auditor specializing in high-tech companies, according to his online biography.
Following the November 18 raids, authorities only allowed publication of names of two of the ten suspects arrested: Beitar Jerusalem football club owner Moshe Hogeg and former Singulariteam CEO Adi Sheleg. A gag order was placed on the others.
Invoking the Open Court Principle that is a foundational part of Israeli law, the Times of Israel, together with the UK’s The Financial Times, and separately, the Haaretz newspaper persuaded judges in the case to lift the gag order on Ziv.
The names of the other seven suspects remain under a gag order. Lawyers for The Times of Israel, The Financial Times and Haaretz continue to battle in court to have this gag order removed.
According to his November 18 arrest warrant, Ziv, along with nine others, is suspected of “carrying out investor fraud through a number of cryptocurrency enterprises” and pocketing tens of millions of shekels. The charges against Ziv and nine others include fraud, aggravated fraud, embezzlement, conspiracy to commit a crime, money laundering and tax violations.
Moshe Hogeg (L) is released to house arrest, December 14, 2021. (Screen grab/Ynet)
Ziv’s attorneys Elad Ran and Hila Tirosh told The Times of Israel that their client “is certain and confident that there was no fault in his conduct — and that this will also be the conclusion of law enforcement at the end of the investigation.”
Big game
Moshe Hogeg and his colleagues at the Alignment blockchain hub were behind numerous cryptocurrency ventures, including Sirin Labs, Stx Technologies Limited (Stox), Leadcoin, and PumaPay.
The arrest warrants do not indicate which companies are alleged to have been part of the fraud. However, the language of the arrest warrants echoes allegations leveled in a May 2021 lawsuit by former employees of Singulariteam against Sirin Labs, Stx Technologies Limited (Stox) and Leadcoin.
The lawsuit is one of several by former investors against Hogeg-led cryptocurrency companies that raised money through initial coin offerings or ICOs. Most were settled out of court.
According to court filings in this case, police froze the bank accounts of Singulariteam, Sirin Technologies. Webydo and Alignment.
An initial coin offering is a type of fundraising used by blockchain startups. The investor is presented with a short film about the startup, biographies of its founders, and a “white paper” explaining the technology and business plan in more detail. If the investor is impressed by the startup, he can buy tokens in its initial coin offering. These tokens often give him access to the product and if the product is successful, it is hoped the tokens will rise in value on a secondary exchange.
Portuguese model Sara Sampaio promoting Sirin Labs Solarin phone (Screenshot)
The case against Hogeg and the other nine, dubbed “The Big Game,” by police investigators, is unprecedented in terms of the amount of money alleged to have been stolen. Over the past 15 years, Israel has become a hub of investment fraud against victims abroad, and police and justice officials have been criticized for rarely prosecuting suspects here.
That lack of action was thrown into sharp relief recently by a series of high-profile raids on alleged Israeli investment scammers instigated by German, Austrian and US law enforcement agencies, and carried out in Israel and a number of European countries. Among those arrested was a former colleague of Hogeg’s at Mobli, Guy Grinberg, who is suspected of cryptocurrency-related crimes.
Open courts vs. gag orders
Israel does not have a formal constitution but instead has thirteen Basic Laws that function as a de facto constitution. One of these basic laws, The Judiciary, determines that “courts will deliberate publicly unless otherwise stipulated by law or if the court determines otherwise by law.”
Israeli law further mandates that “the principle of public deliberations means that court proceedings can be publicized and this expands the courtroom to those who are not physically present.” Israeli law allows courts to prohibit the publication of a suspect’s name provided he or she has not yet been indicted and if the court “determines that the publication will cause the suspect grievous harm and… that preventing the damage is preferable over the public interest in publication.”
On November 18, the 10 suspects were brought for their remand hearing before Judge Erez Melamed, a former criminal defense attorney who now presides over remand hearings in major fraud cases at the Rishon Letzion Magistrate’s Court.
All of the suspects with the exception of Moshe Hogeg asked for a gag order and eight of these nine requests were granted. Since then, lawyers for ToI, The Financial Times and Haaretz have spent dozens of hours arguing in court that the gag orders should be lifted, insisting that the public has a right to know the suspects’ names.
The suspects’ attorneys for their part argued, variously, that the publication of their names would do grievous harm to their reputations, to their families’ social lives, to their or their families’ physical and mental health or to their ability to raise money from investors in the future.
The gag order on Ziv’s name was lifted after a district court judge determined that the potential harm caused by publication of his name was not exceptional or anomalous and that the public’s right to know takes precedence over any damage that might occur to him or those close to him.
Additional hearings in the cases of the gag orders on the other suspects’ identities will take place next week.
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