According to United States prosecutors, an employee of Bank Leumo Le-Israel devised a novel method to assist an American client to hide his assets from Internal Revenue Service (IRS). The concerned employee carried the account statements into American soil through a concealed USB flash drive. The drive was hidden in her necklace.
The US citizen concerned was Masud Sarshar, a natural US citizen of Iranian origin. He has agreed for a guilty plea on charges of hiding in excess of $21 million via accounts at Bank Leumo Le-Israel Limited. According to the Justice Department, two other Israeli banks were involved as well.
This particular case makes its mark as the United States moves its sights related to offshore tax cases from Switzerland to other countries. A number of Swiss banks sidestepped prosecution when they paid $1.37 billion in the form of penalties. They also admitted to help Americans cheat on taxes. Banl Leumi likewise consented to pay about $400 million for helping US clients evade taxes for more than 10 years. The bank has consented to cooperate with all investigations and their related activities.
Papers filed with the court spells out the way Sarshar, who owns a successful clothing business, wanted to avoid any paper trails that may expose his offshore funds. He subsequently used a code name to set up a bank account in 1993. The bank was an unnamed Israeli one, and Sarshar would meet his relationship manager secretly so that the latter may show copies of the account statements.
Sarshar subsequently opened three Banl Leumi accounts in 2007. He hid those accounts under the names of entities he himself created. The relationship manager knew of his desire to keep his assets a secret and thus acted accordingly. The plea agreement further said that the same relationship manager brought the correct electronic copies of the account in Bank Leumi when she visited the US. This was made possible by concealing the USB drive as a part of a necklace. The relationship manager escaped prosecution and not charged with any kind of wrongdoing.
The three Bank Leumi accounts were closed by Sarshar in 2011. He reportedly conveyed his worry to the manager there and expressed the apprehension that the accounts will come in the notice of American investigators. The relationship managers also provided him what is colloquially named back to back loans. He used this legal process to move approximately $19 million to US and not putting he IRS in alert.