US court confirms Leumi tax evasion settlement

Bank Leumi branch picture: Tamar Mitzpi

The Israeli State Comptroller is to investigate the Bank of Israel's conduct in the affair.

Bank Leumi (TASE: LUMI) reports today that the Federal Court in California has approved the settlement that the bank signed to bring to a close the affair in which it was accused of aiding US citizens to evade taxes. Bank Leumi signed an agreement with the US Department of Justice two weeks ago in which it admits helping American customers to conceal tax liabilities from the US authorities. The bank is paying a fine of over NIS 1.5 billion.

"Globes" reported yesterday that the Israeli State Comptroller will investigate the conduct of the Supervisor of Banks at the Bank of Israel in the Leumi tax affair. Two more investigations into similar allegations are underway at Bank Hapoalim (TASE: POLI) and Mizrahi Tefahot Bank (TASE:MZTF), and it is no clear how large a fine they will have to pay. The State Comptroller will examine whether the Bank Supervision Department, headed by David Zaken, knew of the banks' activity in this regard, how he acted during the US investigation, and whether steps have been taken to prevent such activity in the future.

The Accountant General at the Ministry of Finance, Michal Abadi-Boiangiu, has approached Bank Leumi over the possibility that it will sue office holders to indemnify it against the fine to be paid to the US authorities or for an explanation of why it will not do so. Abadi-Boiangiu has also asked for the bank's position on the involvement of office holders who decided to assist US customers in evading tax, thanks to which they apparently earned large sums.

Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Bank Leumi branch picture: Tamar Mitzpi
Bank Leumi branch picture: Tamar Mitzpi
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