Israel’s Biggest Bank is Also the United States Biggest Swindler

Bank Hapoalim fined $904 million over US clients’ tax evasion, FIFA scandal

May 3, 2020

Israel’s Bank Hapoalim has settled a case brought against it by U.S. authorities for assisting U.S.-based clients to evade taxes and involvement in a bribery affair that shook FIFA, the world soccer federation.

Under the deal seeking to settle claims addressing actions between 2002 and 2014, Israel’s biggest bank was ordered to pay an overall fine of $904 million: $874.3 million to settle the tax-evasion claims and $30 million for its involvement in the FIFA scandal.

The FIFA case dates back to 2015, when 14 people were indicted in connection with an investigation by the FBI and IRS into wire fraud, racketeering and money laundering by FIFA and other sports-industry officials.

“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,” financial daily Globes quoted U.S. Attorney for the Southern District of New York Geoffrey S. Berman as saying.

“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,” said Berman.

The U.S. Justice Department said that Bank Hapoalim had pleaded guilty to “conspiring with U.S. taxpayers and others to hide more than $7.6 billion in more than 5,500 secret Swiss and Israeli bank accounts and the income generated in these accounts from the Internal Revenue Service.”

According to the report, the bank insists that the detailed arrangements referred to by the U.S. Department of Justice concerns actions by Bank Hapoalim Switzerland, solely.

Globes noted that the fine imposed on Hapoalim is higher than penalties paid by other Israeli banks, namely Bank Leumi and Mizrahi Tefahot Bank, for their involvement in similar tax-evasion affairs.