Deutsche Bank Sued For Allegedly Avoiding Federal Taxes

Deutsche Bank AG is being sued by the U.S. Attorney's office in the Southern District of Manhattan over allegations of attempting to avoid federal income tax. The lawsuit announced on Monday by U.S. Attorney Preet Bharara is seeking $190 million in taxes, penalties and interest. Several other financial firms were named in the suit, including BMY Acquisitions Corp. and First Union National Bank, now known as Wells Fargo & Co. . Deutsche Bank is accused of intentionally acquiring a corporation to hold stock with a low-cost basis, so that the sale of its stock would trigger taxable gains, starting in 1999. The bank later allegedly created three shell companies that were underfunded special-purpose vehicles to be stuck with a tax bill that it would not pay. "Through fraudulent conveyances involving shell companies, Deutsche Bank tried to make its potential tax liabilities disappear," said Manhattan U.S. Attorney Preet Bharara. "This was nothing more than a shell game."

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