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Deutsche Bank Suisse Resolves Tax Case; to Pay $31M

On Tuesday, Deutsche Bank Suisse, a unit of German lender - Deutsche Bank AGDB entered into an agreement with the Department of Justice (DOJ) under which the bank will pay a penalty of around $31 million. The non-prosecution deal entered under the Swiss Bank Program will help the bank avoid possible prosecution for helping Americans in tax evasion.

Deutsche Bank's Swiss unit performed certain intentional malpractices, which helped U.S. taxpayers evade taxes on certain assets and income from the Internal Revenue Service. Notably, the Swiss Bank Program announced in August 2013 by the DOJ aids the Swiss banks to resolve their misconducts in the U.S. To be part of the program, the Swiss Banks are required to provide details of their tax-related criminal activities and co-operate with the department. Moreover, they must agree to the penalties as well.

"Deutsche Bank (Suisse) SA fully cooperated with the Department of Justice and is pleased to have reached an agreement that resolves this Swiss affiliate's legacy tax-related issues under the Swiss bank program," the company said in a statement.

Notably, of the 57 agreements with the Swiss Banks this year, Deutsche Bank Suisse's penalty amount is the third-largest payment. Moreover, banks in agreement of providing full details of the accounts related to tax evasion have paid around $570.4 million in total.

In a statement of facts released on Tuesday, the bank admitted that from August 2008 through August 2013, "Deutsche Bank Suisse enabled some U.S. taxpayers to evade their U.S. tax and filing obligations, resulting in the filing of false income tax returns with the IRS and allowing U.S. taxpayers to hide offshore assets."

We believe that ongoing investigations on banks will be a step forward toward reducing the huge losses incurred due to malpractices. Regulatory authorities are investigating scandals and are determined to put forward a landmark judgment to terminate such shrewd practices in the future, bring justice to the sufferers and punish the wrongdoers.

Deutsche Bank currently holds a Zacks Rank #4 (Sell). Some better-ranked foreign banks include Grupo Financiero Galicia S.A. GGAL , Banco Macro S.A. BMA and Erste Group Bank AG EBKDY . All three carry a Zacks Rank #1 (Strong Buy).

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DEUTSCHE BK AG (DB): Free Stock Analysis Report

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BANCO MACRO-ADR (BMA): Free Stock Analysis Report

ERSTE GROUP BNK (EBKDY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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