Fourteen people, including a senior investment manager at Swiss financial services giant UBS, have been arrested as part of a probe into tax evasions by Israelis, the details of an investigation released for publication Wednesday show.
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Thousands of Israelis have hundreds of millions of euros in Swiss accounts, and much of the money isn’t being reported to the Israeli Tax Authority, the inquiry alleges. More arrests in the case are expected.
Haifa District Court Judge Orit Kutner on Wednesday cleared the details for publication but has not yet permitted publication of the suspects’ names.
UBS said in a statement that the parent and Israeli subsidiary aren’t subjects of the investigation. It declined further comment.
Also among the detainees are 12 Israelis who have accounts at the bank. Two of the suspects own a medical practice with dozens of outlets abroad, and used to manage the On fertility clinics in Israel before moving their operations overseas.
The medical practices have turnover of 40 million euros ($50 million) a year and are registered in tax havens. The Israeli aspects of the clinics – operations and management — are allegedly not being reported.
The Tax Authority said the investment adviser, who directly handles the Israelis’ accounts, was arrested in Tel Aviv on June 26.
“The investigation found that as part of his job, the investment adviser would come to Israel for secret meetings with customers who avoid sending the bank instructions and documents via phone, email or fax due to fears of exposing their accounts at UBS Switzerland,” stated the Tax Authority.
Authority investigators were secretly monitoring these meetings. One meeting with one of the fertility clinic owners took place at a Tel Aviv luxury hotel. Investigators observed the meeting and then arrested the participants as it finished, the Tax Authority said.
The investigators then searched the investment adviser’s hotel room and the bank’s offices in Israel. They turned up a list of hundreds of names, allegedly bank customers who were not reporting their Swiss holdings to the authorities.
They said the investment adviser had arrived in Israel a day earlier and met with Israeli customers while accompanied by a team leader from UBS Switzerland.
The adviser intentionally helped these customers avoid Israeli taxes, the Tax Authority alleges.
The agency also alleges that the clinic owners accumulated some 15 million euros in their Swiss bank account since 2009, none of which was reported. The business’s accountant was also detained.
Inspectors also found some $500,000 in cash at the home of one of the clinic owners.
The Tax Authority is currently investigating other individuals who appeared on the investment manager’s list. One suspect owns a law firm in Tel Aviv and allegedly has $1 million in a UBS account; the suspect allegedly submitted a false wealth report omitting the existence of that account.
Many of the other suspects also have accounts at UBS with close to or more than 1 million euros.
The suspects in the case have been released on bail.
Israelis are required to submit an asset report to the Tax Authority if they have foreign assets that generate revenue, even in years when those assets incur losses in practice.
Attorney and accountant Ayelet Hillel – Birenzwig, an expert in tax law at Shekel and Co. Law Offices,
said rumors about the list of names had driven many customers to call in order to properly report their assets.
“It’s clear the Tax Authority isn’t just waiting for people to come to it, but is also going out and looking for tax evaders,” she said.