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1 May, 2020 05:04

Israel’s largest bank agrees to $874mn fine for conspiring to help US citizens hide $7.6 BILLION in assets overseas

Israel’s largest bank agrees to $874mn fine for conspiring to help US citizens hide $7.6 BILLION in assets overseas

The top bank in Israel will hand over just shy of $900 million to the US Treasury after it was implicated in a tax evasion scheme, helping Americans to hide billions of dollars in wealth in thousands of foreign accounts.

Bank Hapoalim BM, as well as its Swiss subsidiary, agreed to pay the damages after submitting a guilty plea over allegations that it concealed some $7.6 billion in over 5,500 secret Swiss and Israeli bank accounts, the Department of Justice announced on Thursday. The $874 million sum is the second-largest recovered by the Treasury in an offshore tax evasion case since 2008, the DOJ added.

“Today, Bank Hapoalim is being held accountable for its conduct – it has admitted to its crimes and will surrender all fees it earned, repay the United States for lost tax revenue, and pay a substantial fine,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman.

At least four senior bank executives, including two former board members, were “directly involved” in the tax avoidance scheme, according to US officials. They were implicated in the conspiracy in a years-long joint investigation by the DOJ, the Internal Revenue Service’s criminal division and US attorneys.

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“Today’s resolutions and payment of $874 million make clear that tax evasion cannot be taken lightly,” deputy Attorney General Jeffrey Rosen said, adding that “a fair tax system requires even-handed compliance, and honest conduct by all participants in the system.”

In a separate case brought by the US government, Hapoalim was accused of murky dealings with FIFA and laundering over $20 million in kickbacks and bribes to the international football organization’s officials. The bank will pay $30 million for its role in that plot, which was merely one facet of its broader money-hiding operation.

Primarily a retail bank, Hapoalim has some 250 branches in Israel and manages more than 2.5 million accounts in total, the DOJ said, while the Swiss subsidiary is based in Zurich and at various times during the US investigation kept branches in Geneva, Luxembourg and Singapore.

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