Shokrallah Baravarian, a former assistant manager of a Mizrahi Tefahot bank branch in Los Angeles, has been indicted by U.S. authorities for offenses that include allegedly assisting the bank’s U.S. customers in evading American taxes, the bank reported on Sunday.
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The indictment, which was filed last week, accuses Baravarian of referring customers of the Los Angeles branch to the bank’s headquarters office in Tel Aviv, where they deposited unreported income in return for which they received back-to-back loans for the same amount in Los Angeles, Mizrahi Tefahot said in a statement to the Tel Aviv Stock Exchange. Baravarian is the second assistant manager at the Los Angeles branch to be indicted on such charges.
The indictment against his predecessor, Yossi Roth, was dropped in 2008 in a plea bargain in which the defendant admitted to assisting tax evasion and money laundering. Unlike Roth, who was in detention for an extended period, Baravarian has not been arrested and as far as is known has not been barred from leaving the United States. According to the indictment, Baravarian helped the bank’s clients hide the fact that they had received the loans in exchange for the deposits in Tel Aviv, which were allegedly transferred to Israel via Switzerland.
Mizrahi Tefahot said the bank itself was not included in the indictment. The indictment refers to the institution that made the loans as Bank “A” in Tel Aviv and was not accused of wrongdoing. The case could pose problems, however, for Mizrahi’s operation in Switzerland, which is under investigation by American tax authorities. American citizens are required to report financial accounts exceeding $10,000 held outside the United States, a requirement that Baravarian is accused of helping customers evade.
Shares of Mizrahi fell 0.7$ to 45.55 shekels ($13.19) in TASE trading on Sunday.