German Banks Up Scheisse Creek on Tax Shelters

It was bad news all around yesterday for German bankers, as HVB agreed to shell out $30 million to the Feds and it became public knowledge that Deutsche Bank was also under investigation for their involvement in “questionable” tax shelters. HVB’s settlement included the unusual admission of criminal wrongdoing and allows the firm to avoid trial if they are good jungen and madchen for the next eighteen months. Deutsche may be in bigger trouble given its larger role in the “blips” shelters--non-bona fide loans to investors that generated phony tax losses. The bank reportedly earned $44 million making 56 such loans over 1999 and 2000. Deutsche has already been sued by numerous former clients who bought these types of shelters from it.
Tax Inquiry Includes German Bank [NY Times]

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