Sunday, June 8, 2014

Bank Leumi Moves Toward Resolution of Criminal Conduct in U.S. Branches (6/8/14)

There are reports that Bank Leumi, the Israeli Bank, will pay a 1 Billion NIS (Shekels) fine   E.g.,
Report: Bank Leumi to Pay NIS 1 Billion in Fines to US for Suspected Money Laundering (JewishPress.com 6/8/14), here.  I am told this is just under $300 Million USD.  The conduct penalized involves the activities of U.S. branches (such as the back to back fake loans conducted in the Los Angeles branch).  The reports mention money laundering, but the gravemen of the cases involving those branches have been more focused on tax and FBAR misdeeds.  Of course, money laundering is just a short step away from tax.  Although tax is not a specified unlawful activity, wire and mail fraud is and almost all tax crimes can be escalated to wire and mail fraud, subject to DOJ's directives to charge tax crimes as tax crimes.

I presume that, if Bank Leumi is close to accepting a penalty, there will contemporaneously be a resolution of possible criminal prosecution.  I have no idea what that resolution might be.

Also, Bank Leumi's Swiss subsidiary is one of the remaining banks under criminal investigation and therefore, that will be a second shoe that falls on Bank Leumi.  Of course, Bank Leumi could try to resolve both at the same time.

11 comments:

  1. This would be fine if it concerned individuals living in America, but it is really disgusting that America is harassing innocent expats with this madness. America needs to stop behaving primitive like Eritrea and it needs to grow up to become a civilized nation.

    ReplyDelete
  2. Jack, check out this Forbes article:

    http://www.forbes.com/sites/stephendunn/2014/06/08/beware-of-swiss-banks-urging-ovdp/

    ReplyDelete
  3. Againnoone,


    I saw that this afternoon. I gave it a quick read and confess that I did not understand some key parts of the blog. So, I am going to look again tomorrow. It is in the general area of my blog above, particularly the asterisk. So, maybe I will use this guy's blog to segue into my subject.


    Thanks,


    Jack

    ReplyDelete
  4. Regarding point 1, it appears that in addition of proof such as a preclearance request, form 906, etc. banks are also requesting a release allowing them to provide all information to the IRS. It would not seem prudent to sign such a release until preclearance has been confirmed.

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  5. Anonymous,

    I posted indirectly on this issue today, in the sense that if the depositor gives the release / waiver, the depositor has likely given up its valuable asset without remuneration (at least depending upon how the waiver / release is worded).

    I think the key date is the date of the preclearance request letter. If the preclearance is approved, it all will flow smoothly. If it is not approved, then I am not sure what benefit giving the waiver / release is over having filed the preclearance request letter. I do think, however, that it would be a mistake to give the waiver / release before the preclearance request letter.

    And, for the reasons noted in the blog today, I am not sure that it is smart in any event to give the waiver / release.

    Take a look at the blog from earlier today:

    http://www.federaltaxcrimes.blogspot.com/2014/06/swiss-banks-requests-to-us-depositors.html



    Jack Townsend

    ReplyDelete
  6. GlobalCapitalismJune 12, 2014 at 2:13 AM

    Britain becomes haven for U.S. companies keen to cut tax bills

    http://www.reuters.com/article/2014/06/09/us-britain-usa-tax-insight-idUSKBN0EK0BF20140609

    ReplyDelete
  7. GlobalCapitalismJune 13, 2014 at 7:49 AM

    FIFA’s “obscene” tax abuses

    ReplyDelete
  8. Jack do you know how long its taking for Pre Clearance now a days? I send mine in around 50 days ago and no response yet...

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  9. That is longer than I have experienced. You might call and ask if there is a reason for a delay.

    I did have a delay. After about 40 days, I called and found out that it was going through a review process because the taxpayer had been flagged for audit (although he had never been told). At first, they indicated that they might preclear anyway, but ultimately, I think, to be consistent with the rule they adopted, they denied preclearance. The agent was assigned and we were signaled that, at the end of the audit, we would get the OVDI result we originally sought to join the program. We have not yet closed the audit, but we are assuming that we will get that result.

    Jack Townsend

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  10. For e.g. on a $100K foreign property, how do we calculate the yearly depreciation expense or depletion? Most of the CPA's don't know on this.


    Thank you

    ReplyDelete
  11. Ireland has also been in the news lately because it offers similar deals.

    ReplyDelete

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