Israel’s Bank Hapoalim BM and its New York branches must pay a $220 million penalty to the New York State Department of Financial Services for intentionally allowing US clients to evade federal and state taxes through an illegal cross-border banking business. The bank must also pay over $874.27 million to the US Departments of Justice and Treasury, and the Federal Reserve.
Since the 2000s, Bank Hapoalim and its Swiss subsidiary helped US clients evade taxes by creating secret overseas bank accounts. The bank used a variety of additional schemes to help its US clients evade taxes. These include using incorrect forms of identification to hide nationality and pseudonyms to hide the names of the account holders. Additionally, the bank did not declare US beneficial owners of offshore entities. It also provided US citizens and permanent residents access to their assets held overseas.
Besides the $220 million fine, the bank must also amend its policies so that such illegal activities never happen again. Moreover, some specific members of its present staff cannot work for it in any capacity now.