The State of New York Department of Financial Services has imposed a civil penalty of $130m, upon Bank Leumi, for assisting high net-worth Americans in hiding wealth from their tax authorities. Apparently, when US law enforcement activity against UBS and other Swiss banks that were facilitating American tax evasion caused a decline in Swiss participation, Bank Leumi, using its wholly-owned affiliates in the USA, Switzerland and Luxembourg, actively solicited US clients who were exiting Switzerland, and approached other potential clients with tax evasion schemes.
The bank literally adopted the Swiss tactics:
(1) Sending its officers covertly into the US, posing as tourists, when they were there to meet tax evading clients, brief clients on their holdings, and solicit new ones.
(2) Holding all correspondence for their clients at the bank, and giving those clients numbered accounts, or accounts held under aliases.
(3) Sending US clients to tax haven lawyers and financial consultants, in Panama, the BVI and Belize, for the purpose of corporate formation of shell companies, to further conceal beneficial ownership.
(4) Giving the clients access to their hidden wealth, by granting them bogus loans, through third parties, to further conceal the fact that the clients were simply receiving their own funds.
(5) Suggesting to US clients that they avail themselves of the Bank Leumi tTust, to add an additional layer of "protection," to their secrecy scheme.
Readers who wish to review the complete text of the Consent Order can access it here*.
*Consent Order pursuant to Banking Law