Bank Leumi Le Israel BM has agreed to pay $400m to US authorities to settle two separate probes into whether it helped wealthy Americans evade taxes.
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Under the settlement, Bank Leumi would pay about $270m to the Justice Department and $130m to New York’s Department of Financial Services.
Bank Leumi has also terminated some senior employees involved in misconduct and also agreed to hire an independent monitor review its compliance programs, the New York State Department of Financial Services said.
As part of the agreement, Bank Leumi Luxembourg and Leumi Private Bank will stop providing banking and investment services for all accounts held by US taxpayers.
The lender will also provide the names of more than 1,500 of its US account holders. The bank admitted that it used sham loan arrangements to allow clients to avoid taxes and have access to the funds.
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By GlobalDataThe New York state superintendent of the Department of Financial Services Benjamin Lawsky said: "Bank Leumi employees engaged in a series of egregious schemes including creating complex, sham loan arrangements to help its US clients shirk their responsibility to pay taxes.
"What’s worse, when certain Swiss banks began to put the brakes on this type of misconduct, Bank Leumi instead hit the accelerator even harder -viewing it as a ‘golden opportunity’ to pick up new business," he added.
