According to the DoJ, a Los Angeles man pleaded guilty on August 20, 2018 in U.S. District Court for the Central District of California to willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR), which would have disclosed his foreign bank accounts.
According to court documents, Ben Zion Birman, of Los Angeles, California held offshore accounts in Israel at Bank Leumi Le-Israel B.M. from 2006 to 2011. Birman willfully failed to file with the Department of Treasury an FBAR for calendar year 2010, despite having over $1 million in Bank Leumi accounts.
In an effort to further hide his money, Birman instructed Bank Leumi to hold bank mail from delivery to the United States, and obtained access to his offshore funds through the use of “back-to-back” loans, which were designed to enable borrowers to tap their concealed accounts. These lending arrangements permitted Birman to have funds issued by Leumi’s U.S. branch that were secretly secured by funds in his undeclared accounts in Israel.
In December 2014, Bank Leumi entered into a deferred prosecution agreement after the bank admitted to conspiring from at least 2000 until early 2011 to aid and assist U.S. taxpayers to prepare and present false tax returns by hiding income and assets in offshore bank accounts in Israel and other locations around the world. Under the terms of the deferred prosecution agreement, Bank Leumi paid the United States a total of $270 million and continues to cooperate with respect to civil and criminal tax investigations. (Go to our blog post 148 Offshore Banks & Now Financial Advisors Are Turning Over Your Names To The IRS - What Are Your Waiting For? to see the extent of the cooperation by these 148 Offshore Banks, including Bank Leumi; who are providing unredacted client files for the U.S. taxpayer-clients who maintained accounts at their Banks or Financial Instruction.)
“The Department of Justice is Committed to Vigorously Investigating and Prosecuting Offshore Account Holders who Maintain Undeclared Accounts and Willfully Ignore their
U.S. Reporting and Tax Obligations,”
said Principal Deputy Assistant Attorney General Zuckerman.
Birman faces a maximum sentence of five (5) years in prison, as well as a period of supervised release, restitution and monetary penalties. Birman's sentencing is scheduled for December 10, 2018.
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