September 17, 2005
Will Deutsche Bank Get Sucked Into the Tax Shelter Investigation?
The fallout from the KPMG tax shelter business may now be reaching the firms that assisted in the execution of the transactions underlying the shelters. The New York Times reports (here) that Deutsche Bank has been sued for its role in one of the shelters that involved currency trading, and the government's investigation of KPMG involved gathering evidence from the bank. The various tax shelters the accounting firm peddled required the participation of banks and brokerage firms to execute the trades that generated the tax losses used to shelter income of individual taxpayers, and of course the lawyers were their to "bless" the transactions as valid -- at $50,000 a pop in some instances for a cookie-cutter letter, if the indictment of the individuals in the tax shelter case is correct. To this point, none of the individuals have entered into a plea agreement, at least that has been publicly disclosed. If one or more do agree to cooperate in the government's investigation, the prosecution could spread out beyond just KPMG and its former partners. (ph)
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