Bank Leumi is the second largest bank in Israel. The bank allegedly helped American investors avoid their income tax obligations by structuring sham loan arrangements with investors. The “loan” arrangements would allow investors to avoid paying the amount of taxes that they owe to the U.S. government, but they would still have access to their funds.

The U.S. government is determined to stop tax evasion and they are doing so by going after banks and bankers. Unfortunately for the clients of those bankers, many are willing to turn over information on their clients as part of plea deals to avoid jail time or lessen their personal consequences.  Some banks have already paid huge fines and some bankers are already on trial.

United States authorities have prosecuted around three dozen foreign bankers and have arrested more financial professionals for helping U.S. citizens evade their income tax obligations. One of the individuals who was arrested was the former head of UBS’s wealth management for the Americas.

In 2010, the US Congress passed a law attempting to address the problem of US residents being encouraged to move money offshore to avoid tax obligations. Foreign investment companies and foreign banks were profiting from this activity.  The solution is called the Foreign Account Tax Compliance Act (FATCA), and it went into effect in July of 2014.

The Internal Revenue Service has always aimed to fight tax evasion in order to maximize revenue for the United States government. The US and many other developed countries are experiencing ongoing budgetary problems due to the effects of the 2008 crash and following global recession.