From Reuters:
* U.S. files lawsuit against Deutsche Bank AG and other defendants over alleged scheme to avoid federal income taxes
* U.S. attorney Preet Bharara in Manhattan says lawsuit seeks to recover more than $190 million in taxes, penalties, interest
* Lawsuit also names Wells Fargo in its capacity as a trustee, as a defendant...
http://www.reuters.com/...
More, from NASDAQ:
In a complaint filed in the U.S. District Court in Manhattan, the authorities charge the German bank created a series of fake companies to try to make potential tax liabilities disappear.
"This was nothing more than a shell game," U.S. Attorney Preet Bharara said in a statement.
(my bold)
http://www.nasdaq.com/...
A bit more detail from The Hill:
The lawsuit charges that in 1999, Deutsche Bank entered into a deal to acquire a corporation that held low-cost stock that would have led to over $100 million in taxable gains when the stock appreciated.
To avoid paying taxes on those gains, the government claims Deutsche Bank worked with a firm to create three shell companies and deliberately underfunded them.
Specifically, the government says Deutsche sold the corporation and stock to the shell company at an unjustifiably low price, and the shell paid for the acquisition with a short-term loan. Immediately after buying the stock, it was sold off to another Deutsche Bank entity, but the shell company was stuck with the tax liability on the stock’s gains. After paying back the loan that made the deal possible in the first place, the shell company was left with insufficient funds to pay on the taxes owed. Including penalties and interest, the Internal Revenue Service determined it is now owed over $190 million.
http://thehill.com/...
That sounds like some seriously sleazy stuff - not the sort of thing that can be defended as a mistake or oversight, that's for sure. The statute of limitations has probably run out for this particular alleged crime, but if the TBTF banks were getting away with it 15 years ago, isn't it likely they're still doing it?
A big thanks to U.S. Attorney Preet Bharara for bringing the suit. Please keep digging!