UPDATE 2-Israel arrested UBS adviser, 13 others, in tax evasion investigation
Nov 5 (Reuters) – Israel arrested 14 people, including a senior UBS investment adviser, as part of an investigation into Israelis allegedly holding undisclosed bank accounts with UBS worth hundreds of millions of euros, the Tax Authority said on Wednesday.
All 14 had been released on bail soon after their arrests.
In addition to the unnamed senior investment adviser at UBS who was arrested in June in Tel Aviv, 12 Israelis with accounts at UBS had also been arrested, including two suspects who own a chain of health clinics abroad, said the tax authority. An accountant for the clinics was also arrested.
The case came to light only on Wednesday when an Israeli court allowed publication of the arrests and allegations following a petition by an Israeli newspaper. The court is considering whether to release the names of those arrested.
There have been no indictments, the Tax Authority said, as the investigation is still ongoing.
“There are media reports about ongoing tax investigations of Israeli citizens by the Israeli Tax Authorities. UBS – neither UBS AG nor UBS Israel – is not subject to these investigations. We have no further comment on this,” UBS said in a statement.
Israel is starting to crack down on foreign bank accounts held by its citizens after a similar move by the United States to track accounts held by Americans abroad.
The tax authority said it had carried out a long investigation into accounts held by Israelis in Swiss banks and received information that thousands of Israelis maintain accounts in Switzerland, worth hundreds of millions of euros.
“It is suspected that the vast majority of the money held in the accounts is not reported to the tax authority,” it said. “The investigation is still ongoing and more arrests are expected.”
HOTEL MEETING
The authority said that the UBS adviser had arrived in Israel the day before he was arrested. He had met Israeli clients at a luxury hotel in Tel Aviv the following day.
“The meetings were held under secret surveillance of tax authority investigators,” it said. “At the end of the meeting …all the participants were arrested.”
Searches were subsequently made in the hotel room of the UBS adviser, UBS’s office in Israel and in other locations.
Among the adviser’s possessions, investigators found lists of hundreds of Israelis with unreported bank accounts in Switzerland, the authority said, adding that he is accused of helping clients intentionally and deliberately avoid reporting and paying taxes.
It said the adviser — directly responsible for dealing with the accounts — would visit Israel for secret meetings with clients who did not want to send instructions and documents to the bank by phone, mail or fax to avoid revealing that they held Swiss bank accounts.
Leumi, Israel’s second largest bank, last week said a settlement with U.S. authorities over possible tax evasion by the bank’s American clients could be far higher than previously estimated.
The total penalty could reach as much as $600 million, based on Leumi’s previous estimate as well as a settlement offer from New York State’s financial regulator. (Reporting by Steven Scheer; Editing by Keith Weir and Jane Merriman)
