Bank refuses to accept 3.4 million shekels returned by police
A check-cashing business owner, cleared of criminal charges, sought to deposit 3.4 million shekels returned by the police. Bank Hapoalim refused the deposit, citing insufficient proof of the funds' origin. The court upheld the bank's decision.
The Magistrate's Court in Nof HaGalil-Nazareth recently rejected a request by a check-cashing business owner to compel Bank Hapoalim to accept approximately 3.4 million shekels into his account. The funds had been returned to him by the police following the closure of a criminal investigation. Judge Ofer Chaim Sorek ruled that the closure of a case does not grant automatic immunity or clearance from banking regulations, as banks are obligated to exercise independent judgment in the fight against money laundering.
In September 2023, police seized approximately 2.98 million shekels in cash, along with foreign currency, from the business owner's home. The funds were held by the Administrator General until the State Attorney's Office closed the investigation without filing charges. When the police transferred the 3.4 million shekels to the man's private account last May, the bank refused to accept them, citing a lack of satisfactory documentation regarding the source of the cash.
Following negotiations, the bank agreed to accept 1.05 million shekels—an amount matching documented cash withdrawals from the man's business account. The owner refused this partial deposit and sought a court injunction to force the bank to accept the full amount, arguing that the police had already vetted the funds.
Bank Hapoalim argued that there was no economic logic for keeping such a large sum at home. It noted that while 21.2 million shekels in checks were deposited into the business account in the months preceding the seizure, the owner failed to provide computerized records from his currency exchange system to verify the source of the seized cash.
Judge Sorek accepted the bank's position, ruling that the refusal was reasonable given the lack of documentation and the suspicious nature of holding millions in cash. The verdict emphasized that banks act as quasi-regulators and are not bound by the decisions of law enforcement. Compelling the bank to accept disputed funds could expose it to international sanctions. The request was denied, and the business owner was ordered to pay 5,000 shekels in legal fees.
