The US Internal Revenue Service (IRS) is investigating Bank Leumi (TASE: LUMI) customers on suspicion of tax evasion. The IRS contends that three US citizens, Iranian-born Jews residing in Los Angeles, opened a bank account and transferred money to Bank Leumi's main branch in Tel Aviv.
The three men allegedly used this money to obtain a letter of credit from Bank Leumi for their business in the US. This was against money on which tax due under US law had not been paid. The US authorities have reportedly asked former Bank Leumi USA Los Angeles branch manager Dan Meiri to give evidence in the US.
Bank Leumi said in response, "The IRS is conducting an investigation into Leumi customers who are US taxpayers on suspicion of violating US law. Leumi is cooperating with the authorities with regard to these customers and the banking services they received from Leumi by providing information that the bank is legally permitted to provide."
Two weeks ago, it was learned that Bank Leumi was under investigation by the Israel Securities Authority for allegedly including misleading information in a prospectus. The case involves Bank Leumi's publication of a profit warning for the third quarter of 2011 on November 14, 2011, just four days after an offering of deferred warrants. The investigation is an administrative enforcement, not a criminal investigation. Two Bank Leumi executives - EVP and head of Finance and Economics Division Yaacov Haber and EVP and chief accounting office Menachem Schwartz - will be questioned in the case.
Published by Globes [online], Israel business news - www.globes-online.com - on April 9, 2012
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