Bank Leumi Le Israel (LUMI) BM is nearing a $400 million settlement of federal and state investigations into whether it assisted Americans in tax evasion, according to a source with inside knowledge on the matter.
According to the source, who prefers to remain unidentified, Bank Leumi would pay an estimated $270 million to the Justice Department and $130 million to New York’s Department of Financial Services, under the proposed accord.
In recent weeks, the proposed amount has decreased. DFS chief Benjamin Lawsky lowered his request from $300 million to $130 million after it became evident that the majority of the conduct in question took place in Los Angeles, where he does not hold any jurisdiction, the person said.
A settlement has still not been agreed on and the amount is still being negotiated, said bank spokesman Lee Neumann.
In its November 24 earnings statement, Bank Leumi said it has allotted an additional 476 million shekels in the third quarter for a total of $388.39 million, or 1.5 billion shekels, for the U.S. settlements.
Neumann, who did not exclude the possibility of setting aside additional funds, said that the legal team’s most recent approximations of the upcoming payout are reflected in the bank’s provisions.
Caitlin Ferrell, a DFS spokeswoman, and Nicole Navas, a spokeswoman for the Justice Department, declined to comment on the proposed settlement.
The close examination of the Tel Aviv based Bank Leumi is part of a seven-year crackdown by the United States on offshore tax evasion, which has been predominantly focused on Switzerland. Around 100 Swiss banks are trying to avoid being prosecuted by being open regarding their assistamce to Americans evading taxes.
In May, Credit Suisse Group (CSGN) AG’s main bank subsidiary pleaded guilty to charges of helping Americans cheat on their taxes and agreed to pay $2.6 billion to resolve the charges. Lawsky’s office recoeved $715 million out of the total settlement.