http://online.wsj.com/article/SB2000...692111074.htmlDeutsche Punished On Bogus Shelters
By CHAD BRAY
NEW YORK—Deutsche Bank AG agreed Tuesday to pay $553.6 million and admitted criminal wrongdoing to settle a long-running probe over fraudulent tax shelters that allowed clients to avoid paying billions of dollars in U.S. taxes.
Under a nonprosecution agreement with the U.S. Attorney's office in Manhattan and the Internal Revenue Service, the German bank won't be prosecuted for its participation in about 15 tax shelters involving more than 2,100 customers between 1996 and 2002, including shelters marketed by accounting firm KPMG LLP and defunct law firm Jenkens & Gilchrist PC.
"Customers used the transactions to generate more than $29 billion in bogus tax benefits, mainly losses," according to the agreement.
The $553.6 million payment represents the total fees that the bank collected during the period, the taxes and the interest the IRS was unable to collect during the period, and a civil penalty of more than $149 million.
"Deutsche Bank is pleased that this investigation, which concerned transactions that ceased more than eight years ago, has come to a resolution," the bank said in a statement.
Deutsche Bank said it previously had taken "appropriate provisions" for the full amount of the fine and it won't have an impact on current net income.
The agreement resolves an investigation that stemmed from aggressive, prepackaged tax shelters that the government believed were fraudulent.
More than a dozen people were charged criminally in the matter.
However, a federal judge threw out charges against 13 former KPMG executives in 2007 after finding prosecutors violated their rights to counsel by putting undue pressure on the accounting firm not to advance them defense costs.
A former KPMG LLP tax partner, a onetime KPMG senior tax manager and a lawyer in a case were convicted of criminal charges in 2009 in a case once billed as the largest tax-shelter fraud prosecution in U.S. history. The investigation is continuing.
KPMG itself signed a deferred prosecution agreement in which it admitted to the fraudulent sale and marketing of bogus tax shelters and agreed to pay a $456 million penalty.
A conspiracy charge against KPMG was dropped in December 2006.
The shelters at issue included so-called Blips, or bond-linked issue premium structure; Flips, or foreign leveraged-investment program; and OPIS, or offshore portfolio-investment strategy.
Jenkens & Gilchrist issued opinion letters touting the legitimacy of the transactions underlying some of the shelters and marketed some of the shelters. The firm closed its doors in 2007 after entering into an agreement avoiding prosecution and paying a $76 million IRS penalty.
Last year, criminal charges were brought against seven people related to the Jenkens & Gilchrist shelters, including three former Jenkens & Gilchrist lawyers, two former Deutsche Bank employees and the former chief executive of accounting firm BDO Seidman LLP.
Two people pleaded guilty in that case.
As part of its agreement Tuesday, Deutsche Bank agreed not to be involved with any type of prepackaged tax products and to adopt an ethics and compliance program. The bank also agreed to cooperate with prosecutors.
Under the agreement, Deutsche Bank admitted it knew or should have known that the transactions underlying the shelters were "intended to create the appearance of investment activity, but taxpayers were entering into these transactions for the primary purpose of avoiding taxes, as opposed to making profits on the transactions."
Deutsche Bank's U.S. shares ended 26 cents higher, or up 0.5%, at $52.05 in trading on the New York Stock Exchange.
But did DB turn over the list of 2000 Americans who used DB's tax evasion scheme?
no? of course not. I bet they were never even asked for it.
The Rich Are Different From You and Me. They're above the law. Wesley Snipes is in prison, why aren't these 2000 Americans using tax evasion shelters?
Wrong.
The $550 million settlement came a the end of the process that started with the US asking for the 2000 names. Thanks for playing.
UBS/Deutsche mini-roundup:
http://www.independent.co.uk/news/bu...ry-503621.html
http://news.yahoo.com/s/nm/20101222/..._deutsche_bankFRANKFURT/ZURICH (Reuters) – Deutsche Bank's U.S. tax fraud settlement has heightened expectations of more deals being struck as American authorities target overseas banks in a crackdown on tax dodgers.
U.S. prosecutors are pushing ahead with more probes, emboldened after top Swiss wealth manager UBS had to hand over the details of 4,450 clients.
Leads from that case have helped investigators look at banks in Asia and the Middle East, while clients from HSBC have also been under scrutiny, lawyers have said.
"This is the end of the matter for Deutsche Bank, but this is just the second front in the same war," former U.S. Justice Department prosecutor Michael Weinstein said.
http://en.wikipedia.org/wiki/KPMG_tax_shelter_fraud
http://business.timesonline.co.uk/to...cle1867837.ece
http://www.investmentnews.com/articl...FREE/902199983
http://www.walletpop.com/2009/10/30/...n-ubs-scandal/
http://www.theatlanticwire.com/busin...S6HwxWH0.emailGovernment authorities are going after three Swiss bankers suspected of stashing over a billion dollars out of reach of the U.S. Internal Revenue Service.
lol boutons
so did the IRS actually get 2000 names from Germany and the 50K names from Switzerland?
Any tax evaders gone/going to jail or even fined?
there was a settlement. good grasp of the obvious there.
did US taxpayers get jailed or fined for tax evasion?
The Euro frauders got dinged, but what about the US tax evaders?
new charges might mean new discovery. the journey of legal accountability appears to be far from over.
sure, some of the little fish probably went free. thems the breaks.
I don't know if this applies to what you refer to, but I do remember their being a grace period and amnesty of charges for those who came clean.
should be easy to substantiate, if true.
link?
Me?
I just brought up something I remember hearing in the past. Again, I don't know if it applies to the situation under discussion. I don't care enough to look. I brought it up so others can search if they are interested.
we should just take your word for it, then. no problem. i'm sure you'll do others the same courtesy when they fail to verify things they say they remember.
The IRS has said 30,000 U.S. taxpayers with offshore accounts avoided prosecution since 2009 by entering a limited amnesty program, paying back taxes and saying who helped them hide their accounts from authorities.
http://www.businessweek.com/news/201...lius-baer.html
boutons got your back, WC
Wesley doesn't pay taxes and goes to jail
http://articles.cnn.com/2010-12-09/e...?_s=PM:SHOWBIZ
How are these 30K or 50K tax evaders different? And how about a govt website to plaster their names on Internet the way Snipes was?
IRS reviving program seeking offshore tax cheats
The Internal Revenue Service is reviving a program that lets Americans hiding their money abroad pay back taxes and penalties while avoiding criminal prosecution, an effort that in recent years has netted the government billions of dollars.
IRS Commissioner Douglas Shulman, who announced the program's renewal Monday, said previous efforts in 2009 and 2011 resulted in the collection so far of $4.4 billion from 33,000 people, an amount he said "we never thought we'd reach." He said the government could reap several times that amount from the newest initiative plus people deciding against stashing their assets overseas in the first place.
"If we catch people before they come in voluntarily, it's going to be a much worse outcome for the taxpayer,
http://mobile.sfgate.com/sfchron/db_...l=true#display
http://www.spiegel.de/international/...812212,00.htmlMeanwhile, the US Securities and Exchange Commission is also investigating Deutsche Bank, SPIEGEL reports. According to financial regulatory sources, the bank launched one CDO transaction called "START" in which it allegedly allowed the hedge fund of US speculator John Paulson to choose junk mortgage securities against which he could speculate -- without the other investors knowing about it.
Goldman Sachs settled a suit with the SEC in a similar case for $550 million, SPIEGEL reported.
http://www.nakedcapitalism.com/2012/...sche-bank.htmlWhy is there probably less here than meets the eye? For this investigation to be taken seriously, SEC enforcement chief Robert Khuzami would have to resign. He was the general counsel for the fixed income area at the time when the deals in question were undertaken (contra Der Spiegel, START was a program of synthetic CDOs, not just a single deal, just the Goldman Abacus trade that was the focus of an SEC lawsuit was actually just one of 25 Abacus trades). It would not be sufficient for Khuzami to recuse himself from this investigation. Staff would still be concerned about how the probe might affect their ultimate boss.
In addition, the fact that Paulson approached Deutsche Bank has been in the public domain since October 2009, when Greg Zuckerman’s book, The Greatest Trade Ever, was released. It discussed in detail how Paulson approached Goldman, Deutsche Bank, and Bear Stearns about constructing synthetic CDOs so Paulson could bet against the subprime market cheaply. This is how Scott Eichel, a senior Bear Stearns trader, saw it:
“We had three meetings with John, we were working on a trade together,” says Eichel. “He had a bearish view and was very open about what he wanted to do, he was more up front than most of them.
“But it didn’t pass the ethics standards; it was a reputation issue, and it didn’t pass our moral compass. We didn’t think we should sell deals that someone was shorting on the other side,” Eichel says.
"a senior Bear Stearns trader ..... it didn’t pass our moral compass"
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