BANK HAPOALIM – ISRAELI BANK HIT WITH $905M FINE BY USA DOJ for tax evasion, football kickbacks money laundering
Israeli bank Hapoalim has been fined nearly $875 million (CHF849 million) by the United States for hiding $7.6 billion of undeclared assets in Swiss and Israeli accounts. It is one of the largest penalties imposed during the long-running US tax evasion probe into the Swiss banking system.
Hapoalim was also fined an additional $30 million by the US Department of Justice (DoJ) for laundering bribes related to corruption at world football’s governing body FIFA, which is headquarted in Zurich.
In the tax evasion case, Israel’s largest bank, and its Swiss subsidiary, admitted to “not only failing to prevent but actively assisting US customers to set up secret accounts, to shelter assets and income, and to evade taxes,” said US attorney Geoffrey S. Berman of the Southern District of New York in a statementexternal link.
The offences took place between 2002 and 2014, involving more than 5,500 accounts, said the US Department of Justice. At least four senior executives of the banking group, including two board members of its Swiss branch, actively conspired in the fraud. The DoJ warned that it could take further civil or criminal actions against individuals.
The DoJ has deferred criminal prosecution of the bank for three years provided it cooperates with further investigations of its activities up until the start of 2019.
DoJ and Swiss banks
Swiss banks, including branches of foreign banks in Switzerland, have been under investigation by the DoJ since UBS was fined $780 million in 2009 for assisting tax evaders. The probe, which involved around 100 banks, led to the end of banking secrecy in Switzerland.
Hapoalim was one of the few remaining banks under scrutiny. It has been hit with one of the largest fines of any bank, although it did not come close to the penalty of more than $2.5 billion imposed on Credit Suisse in 2014.
In a separate settlement also announced on Thursdayexternal link, Hapoalim also admitted laundering more than $20 million in bribes to top football officials. Once again, the bank’s Swiss branch was involved in the kickback scheme between December 2010 and February 2015.
The bribes were paid by a range of actors, including a sports marketing company, to manipulate the awarding of broadcasting rights to FIFA World Cup tournaments.
In September 2017, Hapoalim group said it would wind down its Swiss banking activitiesexternal link and transfer clients to another bank.
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