JERUSALEM, Sept 22 (Reuters) - Israeli authorities madetheir first arrests in a tax evasion investigation focused onthe Swiss arm of HSBC, taking into custody four diamonddealers who allegedly held undeclared accounts at the bank, thetax authority said on Thursday.
The four Israeli men are accused of holding close to 100million shekels ($21 million) at the bank that was not reportedto the Israel Tax Authority.
A Tel Aviv court later agreed to release them after postingbail. All four have denied the allegations.
Israel's tax authority had been working since February 2015to obtain a list of Israelis with accounts at HSBC Switzerland.In August, it said that French authorities handed over a list ofmore than 8,000 Israeli customers.
HSBC early last year acknowledged "past compliance andcontrol failures" that may have allowed some customers to evadetaxes.
Having a Swiss bank account is not illegal in Israel as longas it is reported to authorities and taxes are paid.
($1 = 3.7609 shekels) (Reporting by Ari Rabinovitch; editing by Ralph Boulton)
HSBC Holdings (HSBA)