JPMorgan pays 25 mn euros in fraud probe

Paris, Sept. 2: US banking giant JPMorgan Chase has agreed to pay a fine of 25 million euros ($30 million) to settle charges of aiding tax fraud at France’s Wendel investment group, prosecutors said in a statement Thursday.

French authorities suspected the bank of helping top Wendel executives set up a profit-sharing entity that let them avoid taxes on 315 million euros of investment gains in 2007 and 2008.

A trial still looms for the 14 executives, which include Wendel's former chairman Jean-Bernard Lafonta and ErnestAntoine Seilliere, a former head of the main employers’ lobby group, Medef.

At a hearing in Paris, JPMorgan’s lawyers said they would not contest the settlement, putting an end to the inquiry against it.

The bank “gained no fiscal benefit” from setting up the investment vehicle and providing financing for the executives, Stephane Noel, president of the Paris judicial court, said at the hearing.

An appeals court had dropped the case against JPMorgan in

2018, but tax authorities and some of the defendants renewed their push to have the bank charged as well, a request that was denied last month.

“The bank had only a very limited role” in the scheme, JPMorgan’s lawyer Thierry Marembert said at the hearing.

The investigation against JPMorgan was launched in 2012 after tax authorities discovered a financial instrument called Solfur, which yielded a net 315 million euros for its shareholders — including three Wendel board members and 11 top managers at the firm —for an initial investment of just

996,250 euros.