Deutsche Bank to face US$190m tax fraud case

New York

DEUTSCHE Bank AG must face a US government lawsuit seeking to recoup more than US$190 million over an alleged tax fraud 15 years ago, after a federal judge on Thursday turned down the German bank's request to dismiss the case. US District Judge Lewis Kaplan in Manhattan rejected arguments that the government failed to state a legally sufficient claim, and waited several years too long to sue. The government accused Deutsche Bank of using shell companies to avoid capital gains taxes on Bristol-Myers Squibb Co shares it acquired in late 1999, when it bought a company sitting on a large unrealised gain in the drugmaker.

Deutsche Bank spokeswoman Renee Calabro had no immediate comment. In December, when the lawsuit was filed, the bank said it had fully addressed the matter in a 2009 agreement with the US Internal Revenue Service. In seeking a dismissal, Deutsche Bank said the transaction was not fraudulent, and that the lawsuit came "out of the blue" to recover taxes allegedly owed by an unrelated third party. But Judge Kaplan said he was "satisfied that the complaint states legally sufficient claims with the pertinent level of particularity". Reuters