U.S. Authorities Investigating Swiss Branches Of Israeli Banks Over Possible Tax Evasion

The Justice Department's Criminal Tax Division is looking into allegations that the Swiss branches of three of Israel's largest banks, Bank Hapoalim, Bank Leumi le-Israel BM, and Mizrahi-Tefahot, helped their U.S. clients evade taxes.  The probe is reportedly in its early stages.  DOJ officials have given the Israeli banks until September 23 to turn over requested data on U.S. account holders.  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 shift also opens up a potential sore spot in the historically close relationship between the United States and Israel, a key diplomatic and military ally in the Middle East. 

See Randall Jackson, "U.S. Authorities Investigating Swiss Branches Of Israeli Banks Over Possible Tax Evasion," 2011 TNT 181-6 (September 16, 2011).

See also Lynnley Browning, "U.S. Tax-Evasion Probe Turns to Israeli Banks," Reuters.com (September 16, 2011).

Posted by William Alan Nelson II, Associate Editor, Wealth Strategies Journal