Monday, July 27, 2015

Eight Deutsche Bank staff to be charged in CO2 trading scam and $150 million tax evasion by Frankfurt chief prosecutor, other current or former Deutsche employees still under investigation-Reuters

7/25/15, "German prosecutor to charge eight Deutsche Bank staff in carbon tax case -Spiegel," Reuters, Frankfurt

"A German prosecutor is set to charge eight Deutsche Bank employees following an investigation into tax fraud linked to trading of carbon certificates, Der Spiegel magazine reported on Saturday, without disclosing any sources.

Frankfurt's chief prosecutor will accuse them of securing fees and bonuses from participating in a carbon emission certificate scam that resulted in tax evasion worth 136 million euros ($149 million), the magazine reported.

At least 14 people have been jailed in three countries so far for their involvement in carbon trading VAT fraud. European police agency Europol has estimated such crime has cost taxpayers more than 5 billion euros in lost revenue since 2008.

The Frankfurt prosecutor said in May that they were investigating 26 current or former employees at Deutsche, 17 on suspicion of tax evasion, five for money laundering and four for obstruction of justice.

Der Spiegel referred to around 21 staff in its report, including the eight to be charged. It said the Frankfurt prosecutor had decided not to charge three people following the investigation and was continuing to investigate a dozen or so other employees at the bank. It did not say whether they were current or former employees.

The Frankfurt chief prosecutor declined to comment when contacted by Reuters.

A spokesperson for Deutsche Bank, contacted by Reuters, said that the bank's investigation into CO2-related matters was continuing. "We are cooperating with the relevant authorities."

The carbon trading scandal emerged in 2009 when British authorities notified Deutsche Bank about suspicious deals, known as "carousel fraud", designed to generate tax refunds when no tax had been paid.

The cases involved buyers importing contracts for CO2 emissions rights into one EU member state from another, free of VAT. The buyers then did not sell them for use in that market but sold them on to an untraceable series of companies in an agreed chain, which ultimately re-exported them, pocketing a rebate from tax authorities, sources familiar with the matter have said.

The carbon tax fraud was one of a long list of scandals and other issues that eventually led to a purge of Deutsche Bank's leadership in June, including the resignation of co-Chief Executive Anshu Jain.

The bank's largest shareholder, Blackrock, denied that it had pushed for Jain to step down, German daily Tagesspiegel said on Saturday, quoting the head of Blackrock's German operations, Christian Staub.

"Members of our global board have made it clear that we did not exercise influence in this case," Staub was quoted as saying, adding that Blackrock would, in general, make itself heard when things get out of hand. "We do exercise influence, but we work behind the scenes.""

A Deutsche Bank spokesperson declined to comment on the Tagesspiegel report. ($1 = 0.9101 euros)."

"(Reporting by Arno Schuetze and Alexander Hübner; Editing by Susan Fenton)"


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