Deutsche Bank admitted criminal wrongdoing and agreed to pay more than US$550 million in connection with its participation in tax shelters that enabled the rich to temporarily avoid paying hundreds of millions of dollars in US taxes, US authorities announced on Tuesday.
Federal prosecutors and the Justice Department’s tax division announced the deal, saying a nonprosecution agreement requires the bank to continue cooperating and to submit to the appointment of an independent expert who will review its compliance measures and ensure it does not help people dodge taxes in the future.
Authorities said that the US$553,633,153 payment by the bank will include that amount of taxes and interest that the Internal Revenue Service was unable to collect from taxpayers from 1996 to 2002 because of the misconduct. It also includes a civil penalty of more than US$149 million.
In a statement, Deutsche Bank said it was pleased that the investigation had been resolved.
“Since 2002, the bank has -significantly strengthened its policies and procedures as part of an ongoing effort to ensure strict adherence to the law and the highest standards of ethical conduct,” it said.
The bank said the payment had already been accounted for and would not have any impact on current net income.
Bank spokesman John Gallagher said the company had no additional comment.
US Attorney Preet Bharara said in a news release that the bank provided a detailed statement of facts describing its wrongful conduct.
The nonprosecution agreement bars the bank from involvement with any prepackaged tax products of the type the bank had previously offered, according to the release.
In court papers, the Department of Justice agreed not to criminally prosecute Deutsche Bank for any crimes related to its participation in a broad conspiracy to defraud the Internal Revenue Service.
Authorities said the scheme enabled wealthy US citizens from 1996 through 2005 to evade about US$5.9 billion in individual income taxes on capital gains and ordinary income. The court papers said they dodged taxes by claiming US$29.3 billion in bogus tax benefits that enabled them to claim losses that did not really exist.
The government said Deutsche Bank participated in about 15 different tax shelters, working 1,300 deals involving more than 2,100 customers.
Some tax shelters were supported by an opinion letter in which accounting giant KPMG and a law firm represented that the customers’ tax position would “more likely than not” withstand IRS challenge, the government said.
KPMG LLP reached its own deal with the government admitting its role in the tax-shelter scheme. The firm avoided criminal prosecution by cooperating with authorities and was fined US$456 million, including US$128 million in forfeited fees from sales of the shelters.
TV and online retailer Momo.com Inc (富邦媒體) yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. Seeking to further shorten its supply chain, the company is to set up another seven satellite warehouses and distribution centers by the end of the year. “Fu Sheng has a fleet of 200 couriers
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
US-CHINA TENSIONS: The company said that it supplies self-designed chips to the Chinese company and, as such, is not affected by the latest US export restrictions Macronix International Co (旺宏電子) said it does not expect its shipments of memory chips to Huawei Technologies Co (華為) to be affected by the latest US export restrictions on the Chinese tech giant. “As long as the company [Huawei] places orders, we will ship [chips], unless the [Taiwanese] government restricts all Taiwanese companies from shipping” to Huawei, Macronix chairman and chief executive officer Miin Wu (吳敏求) said on Monday in Hsinchu. The US Department of Commerce on Friday took a further step to block chip supplies from non-US companies to Huawei by requiring foreign semiconductor makers to get US government permission before
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to