Deutsche Bank Admits Criminal Fraud—Accepts Half Billion Dollar Settlement Agreement in Tax Case

Deutsche Bank has just admitted criminal wrongdoing, and a agreed to pay a $553.6 million settlement to end a year's long dispute with the government over tax shelters prosecutors claimed were.


Under the terms of the deal, the bank will not be prosecuted for tax shelter schemes involving over two thousand customers between 1996 and 2002.

The agreement states the DB customers received "$29 billion in bogus tax benefits, mainly losses".

$149 million of $553.6 million are in civil penalties — with the balance going to make up for taxes and interest IRS was unable to collect during the period in question.

According to Bloomberg,17 former KPMG executives were charged criminally in connections to the case. Thirteen had their charges dismissed by a judge ruled, 3 were convicted, one was acquitted, and others who were later charged pleaded guilty. KPMG itself agreed to a deferred prosecution, and a conspiracy charge against the accounting firm was later dropped.

A law firm involved in the case, the now defunct, Jenkens & Gilchrist, had seven of its employees charged — including two attorneys.

According to the terms of the deal, Deutsche Bank agreed that it knew, or should have known, that the tax shelters were intended "for the primary purpose of avoiding taxes," rather than for legitimate investing purposes.

Deutsche Bank also agreed to avoid all future involvement in prepackaged tax products.

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