Bank Pleads Guilty to Tax Evasion Scheme

Offshore Account Update

Posted on February 27, 2015 |

Bank Leumi is an Israeli-based international bank with subsidiaries in seven countries, including Switzerland. Bank Leumi was under investigation by the Department of Justice and has entered into a deferred prosecution agreement that was recently filed in a California court.

The deferred prosecution deal arose after Bank Leumi was accused of a decade-long effort to help U.S. citizens evade tax obligations. It is the first deal of its kind to be entered into by an Israeli bank.

This case is one more in a long list of “wins” that the Justice Department has had in recent years. The Department of Justice is aggressively investigating banks and investors and is taking legal action for tax evasion schemes. Banks are responding by pleading guilty and turning over information about U.S. account holders who may subsequently find themselves facing criminal and civil actions by the Internal Revenue Service.

If you have money or accounts offshore that you have not declared to the IRS, you need to understand that you are at risk of getting into serious legal trouble. Now is the time to call a New Jersey tax law firm to learn about your options before you are under investigation. If the IRS is already coming after you, you need qualified legal help right away.

Bank Leumi Pays Fines & Provides Information on Investors

Bank Leumi has admitted to helping U.S. investors defraud the U.S. government over a 10-year period. The financial institution reportedly assisted taxpayers in preparing false tax returns and providing them to the IRS.

The bank also did things like holding mail for account holders and making collateralized loans based on the value of offshore accounts so U.S. account holders could keep their foreign funds hidden while leveraging their money in the U.S.  Bank accounts were kept under numbers or assumed names in order to try to keep those accounts secret from the Internal Revenue Service.

For its participation in these and other tax evasion schemes, Bank Leumi will pay the government $270 million in penalties. There are multiple subsidiary banks involved in the deferred prosecution agreement, including a Swiss branch called Leumi Private Bank. A total of $157 million of the money that is being paid to the U.S. government is assessed as part of the Department of Justice’s Swiss bank program that lets Swiss banks avoid criminal prosecution in exchange for large fines.

The Swiss bank program requires the bank to turn over identifying information on U.S. investors. Bank Leumi Group will provide the Department of Justice with details on more than 1,500 U.S. account holders and has also agreed to cooperate with future investigations.

Once investors are under investigation by the government, they generally lose the opportunity to take advantage of voluntary disclosure programs. If you are being investigated or worry about being investigated in the future, you need to speak with NJ tax attorney Kevin Thorn at the Thorn Law Group as soon as possible about representing you. 

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