Tel Aviv – Israeli authorities made their first arrests in a tax evasion investigation focused on the Swiss arm of HSBC, taking into custody four diamond dealers who allegedly held undeclared accounts at the bank, the tax authority said on Thursday.
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The four Israeli men are accused of holding close to 100 million shekels ($21 million) at the bank that was not reported to the Israel Tax Authority.
A Tel Aviv court later agreed to release them after posting bail. All four have denied the allegations.
Israel’s tax authority had been working since February 2015 to obtain a list of Israelis with accounts at HSBC Switzerland. In August, it said that French authorities handed over a list of more than 8,000 Israeli customers.
HSBC early last year acknowledged “past compliance and control failures” that may have allowed some customers to evade taxes.
Having a Swiss bank account is not illegal in Israel as long as it is reported to authorities and taxes are paid.