Bank Leumi Deferred Prosecution Agreement
In its plea for conspiracy following a plea with the DOJ, BHS agreed to pay a total of more than $402 million, which consists of approximately US$139 million in refunds to the IRS; Recovery of approximately $124 million, which is the gross fee paid to BHS by U.S. tax payers with unreported accounts under BHS; a fine of approximately $139 million. The amount of the fine reflects a 25% discount for BHS cooperation. Recent resolutions with Hapoalim Bank regarding its involvement in the alleged tax evasion conspiracy show that U.S. regulators continue to cooperate to act aggressively against non-U.S. companies. Financial institutions that help their U.S. taxpayer clients hide income and assets from offshore bank accounts and hide taxes. In this regard, the DOJ resolution is the third time that an Israeli bank, in particular, has acknowledged such criminal behaviour and is the second largest recovery of the DOJ in its investigations to facilitate offshore tax evasion by foreign banks since 2008.   U.S. Dep`t of Justice, Press release, Bank Hapoalim agrees to pay more than $30 million for its role in the FIFA money laundering conspiracy (April 30, 2020), www.justice.gov/opa/pr/bank-hapoalim-agrees-pay-more-30-million-its-role-fifa-money-laundering-conspiracy. A major Israeli international bank has admitted to conspiring to help U.S. taxpayers prepare and file false tax returns with the Internal Revenue Service (IRS) by concealing income and assets in offshore bank accounts in Israel and elsewhere in the world.
An adjourned lawsuit agreement between The Bank Leumi Group and the Department of Justice was filed today in the Central District of California, which referred the charges for a criminal investigation that accuses the Bank of conspiring to support and assist in the production and presentation of false tax returns and other documents to the Internal Revenue Service. This unprecedented agreement is the first time that an Israeli bank has acknowledged such criminal behaviour, which spanned a 10-year period and included a series of services and products designed to keep U.S. tax accounts secret at The Bank`s sites in Israel, Switzerland, Luxembourg and the United States. The transaction would be a deferred lawsuit agreement, according to the bank. The Swiss subsidiary will sign a business plea agreement with the DOJ with its US clients. „The registration rules for dealers and investment advisors provide central protection for investors,“ said Scott Friestad, associate director of the SEC Division of Enforcement. „Leumi Bank`s efforts to comply with these laws have lasted for years during which the bank continued to benefit from its illegal cross-border activities.“ Both in the data protection authority registered by the BHBM and in the fundamental agreement signed by BHS, the DOJ found that at the beginning of its investigation, „the initial cooperation of the bank was insufficient“.  The Bank`s initial attempts at cooperation have been characterized, among other things, by insufficient internal investigation, the non-disclosure of relevant facts in a timely manner, and the provision of incomplete and, in some cases, inaccurate information and data to the DOJ. The DOJ also noted that hapoalim had not taken appropriate steps to receive emails, resulting in the removal of some relevant email boxes and backup tapes. Due to Hapoalim Bank`s lack of cooperation, the DOJ`s efforts to resolve its investigations in a timely manner have been hampered and its efforts to prosecute potentially guilty individuals have been thwarted.