German authorities reportedly raided Deutsche Bank‘s headquarters Tuesday as part of a sweeping investigation into a multibillion-dollar tax scandal.
In addition to raiding the headquarters, German officials also searched the home of former co-CEO Juergen Fitschen, Bloomberg reported. The raid was part of the German response to the so-called cum-ex scheme that has embroiled top global financial behemoths, including JPMorgan Chase.
GERMAN AUTHORITIES RAID JPMORGAN IN FRANKFURT FOR TAX INQUIRY
“We confirm that, as part of the investigation into the bank in relation to cum-ex, which has been ongoing since 2017, the Cologne Public Prosecutor’s Office is currently carrying out an inquiry at our offices in Frankfurt,” a spokesperson for Deutsche Bank said in a statement to the Washington Examiner.
“As has been the case since the start of the investigation in 2017, the bank continues to cooperate fully with the investigating authority. We are not commenting further due to the ongoing proceedings,” the statement continued.
German prosecutors purportedly arrived at Deutsche Bank’s complex in Frankfurt on Tuesday and have been investigating the company since 2017. In addition to Fitschen, German officials have recently raided the homes of at least nine other people as part of the sprawling inquiry into the bank, per the report.
During the cum-ex scandal, financial sleuths took advantage of a flaw in the German tax code in which they would lend shares of companies to one another to make it seem as though there were multiple owners of a given share, according to the Financial Times. They would then use those shares to suggest taxes on dividend payments had already been paid when, in reality, the participant didn’t pay taxes or own the actual shares. Germany eventually outlawed the financial gimmick in 2012 and deemed it tax fraud.
Germany is estimated to have lost roughly $10 billion worth of revenue in what has been one of the largest financial scandals in the country’s history.
Deutsche Bank has been mired in the fallout from the scandal. At least five former management board members have faced investigations for activity in the scandal, the company reportedly revealed in 2020. The prior year, German officials were evaluating 80 suspects at the company, Bloomberg reported.
Additionally, the company previously settled a cum-ex related matter with prosecutors in 2018 for roughly $4 billion, per the news outlet.
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German prosecutors have raided other international banks as part of the cum-ex inquiry. This includes JPMorgan Chase, Barclays, Bank of America, Merrill Lynch, and Morgan Stanley. Some 1,500 people are facing legal scrutiny from German officials over cum-ex, reports said.
