NEW YORK: Deutsche Bank, Germany's
biggest bank, has agreed to pay $95 million to settle a tax fraud case brought
by the US Justice Department, the federal prosecutor in charge has announced.
Preet Bharara, the US attorney for
the Southern District of New York, said Deutsche Bank used a "web of shell
companies and calculated transactions" to try to evade paying tens of
millions of dollars in taxes.
The US government "has made
Deutsche Bank admit to its actions designed to avoid taxes and pay $95 million
to the United States to account for this conduct," the prosecutor said in
a statement Wednesday.
The case dates back to 2000 with
Deutsche Bank's acquisition of a US holding company, Charter, which had stock
in Bristol-Myers Squibb, the pharmaceutical company.
To avoid paying high taxes on the
gain from the sale of the stock, Deutsche Bank is alleged to have arranged to
sell it to a shell company, and then to buy it back.
The transaction cleansed Deutsche
Bank's gain, sticking the shell company with the $52 million tax bill.
The shell company, BMY, tried to
offset its gain with foreign currency losses, but US tax authorities concluded
the losses were from a fraudulent tax shelter that Deutsche Bank also was
involved in.
Under the settlement, the German bank
admitted the transaction was "pre-planned" and that it was designed
to avoid the tax liability associated with the stock.
It knew the shell company had no
material assets and no operating business, and so could not pay the taxes
resulting from the stock sale.
It was the latest move by Deutsche
Bank to settle pending court cases in the United States.
Last month, it agreed to pay $7.2
billion to settle probes into the sales of toxic mortgage bonds that
contributed to the 2008 financial crisis.
Copyright
AFP (Agence France-Press), 2017
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