Shokrollah Baravarian, of Beverly Hills, was charged on April 30 in the U.S. District Court for the Central District of California with conspiracy to defraud the U.S., the Justice Department and Internal Revenue Service (IRS) announced.

According to the indictment, Baravarian, a former senior vice president at the Los Angeles branch of a bank headquartered in Tel Aviv, Israel, conspired to conceal the existence of undeclared accounts owned and controlled by U.S. customers in Israel. The indictment alleges that these accounts were concealed from the IRS by opening them under pseudonyms, code names and the names of nominee entities set up in the British Virgin Islands and the island of Nevis.

“This charge results from an ongoing and extensive investigation into the use of undeclared bank accounts in Israel, and demonstrates the department’s determination to find and prosecute those who help U.S. taxpayers evade taxes through offshore accounts located anywhere in the world,” Deputy Attorney General James M. Cole said.

The indictment further alleges that Baravarian assisted U.S. customers in secretly accessing the funds in their undeclared accounts by obtaining back-to-back loans from the Los Angeles branch of the bank.

According to the indictment, a back-to-back loan was one that was secured by funds in an undeclared account in Israel and issued by the Los Angeles branch to a U.S. customer. Baravarian is alleged to have helped conceal the fact that U.S. customers were using their own funds as collateral by purposely not keeping copies of loan-related documents in the files at the Los Angeles branch. The documents included Israeli account information and pledge agreements used to secure the loans. As detailed in the indictment, some U.S. customers obtained back-to-back loans from the Los Angeles branch by transferring funds to Israel from other foreign countries, including Switzerland and China.

The indictment further alleges that a banker in Israel would periodically travel to Los Angeles and meet with U.S. customers to discuss their account statements. Prior to making these trips, the banker would redact the names of the U.S. customers reflected on the account statements.

If convicted, Baravarian faces a potential maximum prison term of five years and a maximum fine of $250,000.