The US government has charged a California banker for allegedly helping US citizens hide their assets in secret Israeli bank accounts.

The US government has charged a California banker for allegedly helping US citizens hide their assets in secret Israeli bank accounts.

The US Department of Justice said in a statement that Shokrollah Baravarian, of Beverly Hills, had been charged with conspiracy to defraud the US for allegedly setting up secret accounts in Israel for US clients to keep their money hidden from the Internal Revenue Service.

The indictment alleged that Baravarian, a former senior vice president at the Los Angeles branch of an unnamed Israel bank, had concealed accounts 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 US taxpayers evade taxes through offshore accounts located anywhere in the world,” said Deputy Attorney General James Cole.

The indictment further alleged that Baravarian assisted US customers to secretly access their money by using their offshore funds as collateral to obtain back-to-back loans from the Los Angeles branch of the bank.

A back-to-back loan is when two parties in different countries borrow money from one another in each other's currency in an effort to hedge against currency risk. They are also known as parallel loans.

As detailed in the indictment, some US customers obtained back-to-back loans from the Los Angeles branch by transferring funds to Israel from other foreign countries, including Switzerland and China.

Baravarian faces one charge of conspiracy to defraud the US, with a potential maximum prison term of five years and a maximum fine of $250,000.