Australian tax authorities have filed indictments against two Australian brothers, Michael and Andrew Binetter, over allegations that they used the facilities of Bank Hapoalim and Israel Discount Bank to defraud tax authorities, according to Australian media reports.
The Binetter family has a natural juice company that has a 29% share of the market in Australia. Members of the Binetter family are reportedly suspected of concealing funds at the two Israeli banks and using the funds in Australia through back-to-back loans in which funds that had not been reported to the tax authorities were purportedly deposited in banks in Israel and in return the banks provided a loan of about $20 million Australian (about U.S. $14 million). The interest on the loan would then allegedly be taken as a tax-deductible expense.
The Binetter family denies the allegations against it. Bank Hapoalim issued a statement saying that its conduct was entirely proper, but that the bank was not permitted to comment on its clients’ transactions. Israel Discount Bank refused to comment.
The indictment reportedly accuses the members of the Binetter family of tax fraud of about $100 million Australian, which is reportedly the largest case of its kind since 2006. It was also reported that in 2012, Michael Binetter made indirect contact with a lawyer in Tel Aviv, Amiram Gicelter, seeking to find someone who could destroy the family’s financial records at Bank Hapoalim.
The timing of the case is particularly problematic for Bank Hapoalim, which closed its representative office in Australia five years ago. The bank is currently the subject of an investigation by the U.S. Justice Department, which suspects the bank may have assisted American clients to evade paying taxes through a back-to-back loan scheme.