Attorney General Yehuda Weinstein is to examine the Bank Leumi (TASE: LUMI) tax evasion affair, in which the Israeli bank helped American customers evade US taxes. Weinstein is consulting with a range of regulatory bodies including the Bank of Israel, Israel Tax Authority, Authority for the Prohibition of Money Laundering, and the State Prosecutor to examine civil and criminal implications in order to decide what action, if any, to take.
Israel's Ministry of Justice said, "Since Bank Leumi's compromise settlement in the US was first announced two weeks ago, the Attorney General has been consulting on the matter and called a meeting in his office of the relevant authorities. The facts of the matter presented to the Attorney General led him to the conclusion that there is a need for a comprehensive examination of events, and their results."
Two weeks ago, Bank Leumi signed a settlement with the US authorities in which the bank admitted helping US customers evade tax. Under the terms of the settlement, the US authorities imposed a NIS 1.5 billion fine on the Israeli bank.
The Bank of Israel has already announced that it will examine the affair, and this seemed to have set off a snowball effect with other bodies intervening. Earlier this week State Comptroller Josef Schapira announced that he would investigate the matter and examine the conduct of the Israeli bank. Accountant General Michal Abadi-Boiangiu, on behalf of the State which holds a 6% stake in Bank Leumi, contacted the Supervisor of Banks and Bank Leumi itself regarding the possibility of prosecuting former senior bank executives over the matter.
Meanwhile, Leumi has refused to provide data requested by the Association of Investment Houses in Israel, for a derivatives suit that it has filed against former Bank Leumi senior executives including former chairman Eitan Raff and former CEO Galia Maor.
Bank Leumi said, "The overall issue of American customers depends on a court decision. The bank welcomes the fact that the topic regarding operations with US customers is being examined by the Attorney General, State Comptroller and Supervisor of Banks."
Published by Globes [online], Israel business news - www.globes-online.com - on January 8, 2015
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