U.S. tax-evasion probe adds Israeli banks to the target list


Daylife/Reuters Pictures used by permission

The U.S. pursuit of offshore tax evaders is widening to include Israel, where U.S. authorities are scrutinizing three of Israel’s largest banks over suspicions their Swiss outposts helped American clients evade taxes, people briefed on the matter said.

The banks under scrutiny by the U.S. Justice Department’s criminal tax division are Bank Hapoalim, Bank Leumi le-Israel BM and Mizrahi-Tefahot, the sources said.

The shift to Israel from Switzerland, for years the main focus of the Justice Department’s campaign against offshore private banking secrecy, signals the broadening of a landmark probe by the agency that began in 2007 with UBS AG, Switzerland’s largest bank…

The scrutiny of the three Swiss branches of the Israeli banks is at an early stage and has not reached the level of that of Credit Suisse, which received a target letter from the Justice Department in July, or of HSBC Holdings, a major European bank, and Basler Kantonalbank, a Swiss cantonal bank, said the people briefed on the matter…

American officials are concerned that the…banks appear to have accepted hidden money from American clients who fled UBS in the wake of its scrutiny and assertions by Swiss officials that offshore tax evasion would not be tolerated under the cloak of Swiss bank secrecy rules…

RTFA for notes on connections.

Executives of banks collaborating in tax evasion and tax fraud have to be sleeping a wee bit less sound. Maybe keeping a bye-bye-bag packed and ready to go. I hope.

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