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The Treasury Department today announced that Bank Hapoalim, Israel’s largest bank, has agreed to pay the United States more than $900 million to resolve two high-profile cases.
First, the department announced that criminal charges had been filed against the bank for its participation in a conspiracy with US taxpayers and others to hide more than $7.6 billion in more than 5,500 secret Swiss and Israeli bank accounts and related income from the IRS.
The bank’s Swiss subsidiary, Bank Hapoalim (Switzerland) Ltd., pleaded guilty.
“Israel’s largest bank, Bank Hapoalim, and its Swiss subsidiary have admitted not only failing to prevent but actively assisting U.S. customers to set up secret accounts, to shelter assets and income, and to evade taxes,” U.S. Attorney for the Southern District of New York Geoffrey S. Berman said in a press release. “The combined payment approaching $1 billion reflects the magnitude of the tax evasion by the Bank’s U.S. customers, the size of the fees the Bank collected to provide this illegal service, and the gravity of the illegal conduct.”
According to the Justice Department, it was the second-largest recovery by the department in connection with its investigations into how foreign banks facilitate offshore tax evasion. The biggest was Credit Suisse, which agreed to pay $2.6 billion in 2014.
In another case — the resolution of which was also announced today — Bank Hapoalim and its Swiss subsidiary admitted to conspiring with sports marketing officials to launder more than $20 million in bribes and kickbacks to officials with the international governing soccer body FIFA and other soccer federations.
The bank agreed to pay a $9.3 million penalty and forfeit $20.7 million in connection with that case.
“This announcement illustrates another aspect in the spider web of bribery, corruption and backroom deals going on behind the scenes as soccer games were played on the field,” said William F. Sweeney, the assistant director in charge of the FBI’s New York field office, in a press release. “Bank Hapoalim admits executives looked the other way, and allowed illicit activity to continue even when employees discovered the scheme and reported it.”
