Preet Bharara, the US attorney for the Southern District of New York, announced on Wednesday that Deutsche Bank had admitted its actions to avoid taxes and agreed to pay $ 95 million (€ 89.8 million) to the United States to justify this behavior.
Germany’s largest bank has used a “network of shell companies and calculated transactions” to try to avoid paying tens of millions of dollars in taxes, Bharara added in the statement.
The case dates back to 2000, when Deutsche Bank acquired the American holding company Charter, which held shares in the pharmaceutical company Bristol-Myers Squibb (BMY).
To avoid paying high taxes on the gain from the sale of the shares, Deutsche Bank reportedly made arrangements to sell them to a shell company and then buy them back.
The deal cleaned up Deutsche Bank’s gain, sticking the shell company with the $ 52 million tax bill. The shell company then attempted to offset its gain with currency losses, but U.S. tax authorities concluded the losses came from a fraudulent tax shelter in which Deutsche Bank was also involved.
As part of the settlement, the German bank admitted that the deal was “pre-planned” and was designed to avoid the tax liability associated with the action. He knew that the shell company had no physical assets and no operating business, and therefore could not pay the taxes resulting from the sale of shares.
The settlement was the latest by the German lender in its efforts to close hundreds of lawsuits resulting from past wrongdoing, particularly during the 2008/2009 financial crisis. Last month, he agreed to pay $ 7.2 billion to settle investigations into the sales of toxic mortgage-backed securities that contributed to what has become the subprime mortgage crisis in the United States.
uhe / tb (AFP, Reuters)