Deutsche Bank AG (DB) admitted to criminal wrongdoing and said it will pay $553.6 million to the U.S. Department of Justice to resolve a multi-year probe into tax fraud that generated billions of dollars in U.S. tax losses.
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The German investment bank entered into agreements with the U.S. Attorney’s Office for the Southern District of New York and the IRS to settle without prosecution its participation in various fraudulent transactions and tax shelters for clients from 1996 to 2002.
The fees being paid represent the total funds Deutsche Bank collected during the period, as well as all taxes and interest never collected by the IRS, and a civil penalty of more than $149 million.
Also as part of the deal, Deutsche said it would not participate in any pre-packaged tax products, which were the type of tax shelters previously offered by the bank, and agreed to the appointment of an independent expert to ensure the bank does not participate in future transactions that may be used to defraud the IRS.
If the bank fails to comply with the all requirements, it may face prosecution, according to a statement released by the attorney’s office.
The company, which said it is pleased to close the investigation, said the payment will not have any impact on current net income.