Israel’s Bank Leumi has confessed to helping more than 1,500 U.S. customers evade taxes and will pay the American government $400 million.
The IRS will receive $270 million, and $130 million will go to New York’s Department of Financial Services. Bank Leumi maintains offices in New York, Illinois, Florida and California.
The names of the bank’s American customers involved in the case will be handed over to American investigators.
The Justice Dept. charged the bank with conspiracy but agreed not to prosecute for two years. Bank Leumi officials in the United States met with American clients in parks, hotels and other locations outside the bank to help them hide their assets in undeclared accounts in Israel, Switzerland and Luxembourg.
The bank also provided mail services so account information would not be sent directly to the clients, who kept their foreign accounts secret from U.S. officials who took out loans on the secret accounts.
Even worse, after the Justice Dept.’s probe of Swiss banks for helping U.S. clients evade taxes, Bank Leumi opened accounts for clients who left the Swiss banks, such as UBS, to help them to continue avoid detection.
New agreements between Israel and the United States have required all bank account information of U.S. citizens in Israel to be exposed to the IRS.Tzvi Ben-Gedalyahu