US tax-evasion probe turns to Israeli banks

Reports say the United States authorities are scrutinising three of Israel's largest banks over suspicions their Swiss outposts helped American clients evade taxes.

Sources told the Reuters news agency that the banks are Bank Hapoalim, Bank Leumi le-Israel BM and Mizrahi-Tefahot.

The shift to Israel from Switzerland signals a broadening of a landmark probe by the US Justice Department’s criminal tax division that began in 2007 with Switzerland’s biggest bank, UBS AG.

The scrutiny of the three Swiss branches of the Israeli banks is at an early stage and has not reached the level of that of Credit Suisse, which received a target letter from the Justice Department in July, as did European bank HSBC Holdings and the cantonal bank of Basel.

A spokesman for Bank Leumi in Tel Aviv wrote in an emailed statement on Thursday that “the request was for general statistical data. It appears that this data was to serve as a basis for a comprehensive arrangement between the Swiss and American Authorities”.

The data requested, according to the Reuters sources, covers the types of accounts disclosed by UBS in 2009 as part of a deal with the Justice Department to settle US charges that the bank enabled scores of wealthy Americans to evade billions of dollars in taxes.

It also covers other types of accounts, including those opened after the UBS settlement with the Justice Department in February 2009.