3rd Largest Israeli Bank Agrees to Pay $195 Million and Enters into DPA with US on Tax Violations

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Saturday, March 16, 2019
Author: 
Bruce Zagaris
Volume: 
35
Issue: 
3
Abstract: 

On March 12, 2019, the U.S. Department of Justice announced that Mizrahi-Tefahot Bank Ltd. (Mizrahi-Tefahot) and its subsidiaries, United Mizrahi Bank (Switzerland) Ltd. (UMBS) and Mizrahi Tefahot Trust Company Ltd. (Mizrahi Trust Company), agreed to pay $195 million to the United States and enter into a deferred prosecution agreement. Mizrahi-Tefahot is the third-largest bank in Israel, having more than 4,000 employees, and is publicly trade on the Tel-Aviv Stock Exchange.  During the relevant period of over a decade of criminal activity, Mizrahi-Tefahot had branches in Los Angeles, California, the Cayman Islands, and London, England.  In 2014, the Cayman Islands branch surrendered its license and closed.  UMBS, a subsidiary of Mizrahi-Tefahot, had one branch in Zurich, Switzerland.  Mizrahi Trust Company, a fully owned subsidiary of Mizrahi-Tefahot, operated under the regulatory authority of the Bank of Israel.  Together, Mizrahi-Tefahot, UMBS, and Mizrahi Trust Company provided private banking, wealth management, and financial services to high-net-worth individuals and entities around the world, including U.S. citizens, resident aliens and permanent residents.