Bank Leumi Said to Be Near $400 Million U.S. Tax Evasion Accord
Nov. 26 (Bloomberg) — Bank Leumi Le Israel BM is close to a $400 million settlement of federal and state investigations into whether it helped Americans evade taxes, according to a person with knowledge of the matter.
Under the proposed accord, Bank Leumi would pay about $270 million to the Justice Department and $130 million to New York’s Department of Financial Services, said the person, who asked not to be identified because the talks aren’t public.
The proposed amount has declined in recent weeks. DFS chief Benjamin Lawsky dropped his request to $130 million from $300 million after it became clear that most of the conduct at issue took place in Los Angeles, where he doesn’t have jurisdiction, the person said.
Bank spokesman Lee Neumann said no settlement has been reached and the amount is still being discussed.
Bank Leumi said Nov. 24 in its earnings statement it’s set aside an additional 476 million shekels in the third quarter for the U.S. settlements for a total of about 1.5 billion shekels ($388.39 million).
The bank’s provisions reflect its legal team’s most recent estimates of what it will need to pay, said Neumann, who didn’t rule out setting aside additional funds.
Caitlin Ferrell, a DFS spokeswoman, and Nicole Navas, a spokeswoman for the Justice Department, declined to comment on the proposed settlement.
The scrutiny of Bank Leumi, which is based in Tel Aviv, is part of a seven-year U.S. crackdown on offshore tax evasion that has predominantly focused on Switzerland. About 100 Swiss banks are seeking to avoid prosecution by disclosing how they helped Americans dodge taxes.
Credit Suisse Group AG’s main bank subsidiary pleaded guilty in May to charges of helping Americans cheat on their taxes and agreed to pay $2.6 billion to resolve the charges. Of the total settlement, $715 million went to Lawsky’s office.
–With assistance from David Voreacos in federal court in Newark, New Jersey,.
To contact the reporters on this story: Greg Farrell in New York at gregfarrell@bloomberg.net; Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net Joshua Gallu
