Friday, October 23, 2020

Israel largest bank Hapoalim agrees to pay $874 million to settle US tax charges

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The largest bank in Israel, Hapoalim and one of its subsidiaries has agreed to pay nearly $900 million to the U.S. Treasury after admitting to conspiring with U.S. citizens to hide their assets overseas.

Justice Department officials announced Thursday that Bank Hapoalim B.M. and its Swiss subsidiary had agreed to submit a guilty plea over accusations that it allowed U.S. taxpayers to hide more than $7.6 billion in more than 5,000 bank accounts overseas.

The guilty plea represents the second-largest recovery of funds by the Treasury from banks helping Americans stash money out of the sight of U.S. tax authorities since the 2008 financial crash, the Justice Department added in a news release.

“Israel’s largest bank, Bank Hapoalim, and its Swiss subsidiary have admitted not only failing to prevent but actively assisting U.S. customers to set up secret accounts, to shelter assets and income, and to evade taxes.

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The combined payment approaching $1 billion reflects the magnitude of the tax evasion by the Bank’s U.S. customers, the size of the fees the Bank collected to provide this illegal service, and the gravity of the illegal conduct,” said Geoffrey Berman, U.S. Attorney for Manhattan.

Thursday’s guilty plea came as the result of a joint effort between the Justice Department, the IRS’s criminal division and attorneys for the southern district of New York.

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

The head of the IRS’s criminal division, Don Fort, added that there was “no excuse” for foreign banks to be involved in helping U.S. taxpayers evade the IRS.

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“There is no excuse for a foreign financial institution to unlawfully assist wealthy Americans in flouting their responsibilities to pay their taxes,” Fort said. “With today’s guilty plea, Bank Hapoalim is taking responsibility for their role in deliberately breaking the law and undermining the integrity of this nation’s tax system.”

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