The Tax Times: Bank Leumi to Face $300 Million Settlement Option to Close an Investigation Regarding Their Aiding Americans to Evade Taxes

Friday, October 31, 2014

Bank Leumi to Face $300 Million Settlement Option to Close an Investigation Regarding Their Aiding Americans to Evade Taxes

We previously posted IRS Continues Cracks Down on Undeclared Israeli Bank Accounts! where we discussed our prior posts about US taxpayers with undeclared income from Israeli Bank Accounts:

on Thursday, September 8, 2011 "More Tax Problems for U.S. Citizens with Foreign Bank Accounts in Israel" and
on Monday, March 11, 2013 "IRS Targets Israeli Banks and Their US Client;"

Now according to bloomberg.com's article entitled Bank Leumi Said to Face $300 Million Demand in Tax Case, the New York’s banking regulator will ask for more than $300 million to settle an investigation into whether Bank Leumi Le-Israel (LUMI) BM helped Americans evade taxes, a person familiar with the matter said.

Benjamin Lawsky, head of the state’s Department of Financial Services, is seeking more than what the bank set aside to resolve a separate criminal investigation by the U.S. Justice Department. In June, Leumi said it allotted 950 million shekels ($254 million) for the federal matter, which would make it the first Israeli bank to settle a tax probe with the U.S.

Lawsky has taken a similarly aggressive approach with other banks. As part of a guilty plea in May by Credit Suisse Group AG (CSGN)’s main bank subsidiary, his office secured $715 million of the $2.6 billion penalty.

Bank Leumi, Israel’s second largest lender by assets, said today it’s in talks with Lawsky’s department on a settlement, according to a filing with the Tel-Aviv Stock Exchange. It’s too early to estimate if an accord may be reached and a final settlement may be “significantly higher” than the provisions it’s already set aside to cover those costs, the bank said.

Have unreported income from an Israeli Bank?