Israel’s largest bank pays $870 million to settle US tax evasion probe
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Israel’s largest bank pays $870 million to settle US tax evasion probe

Bank Hapoalim accused of helping US clients evade payments; competitors Bank Leumi and Mizrahi-Tefahot Bank charged in similar cases in recent years

Luke Tress is a video journalist and tech reporter for the Times of Israel

A Bank Hapoalim cash machine. (Yonatan Sindel/Flash90)
A Bank Hapoalim cash machine. (Yonatan Sindel/Flash90)

Bank Hapoalim, Israel’s largest bank, on Wednesday said it would pay $870 million to end an investigation against it by US tax authorities.

The bank was accused of helping US clients evade taxes. The investigation was carried out by the US Department of Justice, the New York Department of Financial Services and other US authorities.

Bank Hapoalim said it agreed to a deferred prosecution agreement.

In March 2019, Mizrahi-Tefahot Bank Ltd., Israel’s third-largest, agreed to pay $195 million for helping US citizens avoid paying taxes by stashing their assets in offshore accounts.

In 2014, the Bank Leumi Group, Hapoalim’s main competitor, agreed to pay a total of some $400 million to US authorities to settle a criminal probe after admitting to helping US taxpayers hide assets.

Hapoalim on Thursday became the first Israeli bank to begin quantifying its losses from the coronavirus pandemic.

The bank said it expects losses in revenue of NIS 450 million due to the outbreak. It reported a fourth quarter loss of NIS 629 million due to the legal settlement and credit loss provisions related to the expected economic downturn.

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