Israeli Banks Said to Be Implicated in U.S. Tax Evasion

A California man born in Israel agreed to plead guilty to conspiring with people at Bank Leumi Le-Israel Ltd. and Mizrahi Tefahot Bank Ltd. to hide offshore accounts and income from the U.S. Internal Revenue Service, according to court filings and people familiar with the matter.

Zvi Sperling was accused Feb. 14 by federal prosecutors in Los Angeles of conspiring with people at two Tel Aviv-based banks, identified only as Bank A and Bank B. The charging document and plea agreement didn’t identify the banks. Bank A is Mizrahi, according to a person who wasn’t authorized to speak publicly about the case. Bank B is Leumi, according to a second person, who similarly asked not to be identified.

Since 2008, U.S. prosecutors have cracked down on offshore tax evasion, charging at least 83 U.S. taxpayers or foreign bankers, lawyers or advisers with tax crimes. UBS AG, the largest Swiss bank, avoided prosecution in 2009 by admitting it aided tax evasion, paying $780 million and handing over account data on 250 clients. It later disclosed information on about 4,450 more accounts. Wegelin & Co., a Swiss bank, pleaded guilty last month. No Israeli bank has been charged.

“The bank has a long-standing policy of not discussing customer relationships,” Orit Reuveni, a spokeswoman for Bank Leumi in Tel Aviv, said in a Feb. 15 e-mail, declining further comment on the case. “We have previously stated that we are among the international banks within the scope of a U.S. inquiry into tax matters involving U.S. customers.”

No one answered the telephone at Mizrahi after regular business hours Feb. 15 in Tel Aviv.

more here: http://www.bloomberg.com/news/2013-02-14/israeli-bankers-helped-california-man-cheat-irs-u-s-says.html