Israel’s investigation in the role Bank Leumi played in helping its American clients evade U.S. taxes moved to a new phase Wednesday after the police’s Lahav 433 unit ordered three bank branches to turn over documents.
Two of the branches are in Tel Aviv and the third in Jerusalem, police said.
Leumi, one of three Israeli banks named in a U.S. probe, settled at the end of 2014 with U.S. Federal government and State of New York by paying a $400 million penalty. But last month Attorney General Avichai Mendelblit opened a criminal investigation against three key Leumi executives who worked at the bank time of the alleged violations —CEO Galia Maor, Chairman Eitan Raff and Zvi Itskovitz.
The probe in Israel is unusual in that similar charges against Swiss, British and French banks ended in deals with the U.S. government and no charges were filed. Mendelblit only came to his decision after two-and-a-half years of discussions by a government committee that examined the settlement Leumi made with U.S. authorities.
Bank Hapoalim and Mizrahi Tefahot Bank face similar investigations by U.S. regulators. Hapoalim is expected to pay a similar fine to that of Leumi.