Tax inquiry raid on Deutsche Bank HQ

DEUTSCHE BANK’S German headquarters have been raided by prosecutors amid a sprawling investigation into tax evasion by some of the world’s biggest banks.

Cologne prosecutors launched searches at the bank’s Frankfurt offices yesterday, Deutsche said, adding that the raid is part of an ongoing investigation, running since 2017, with which the company is fully co-operating.

Deutsche is one of a host of major banks to be raided by prosecutors over the “cum-ex” trading scandal, which robbed European taxpayers of billions of euros.

The German offices of Barclays, Bank of America, JP Morgan and Morgan Stanley have also been searched this year as part of the investigation.

Cum-ex was a trading strategy that defrauded the Continent’s taxpayers of more than €10bn (£8.6bn) through a dividend-stripping scheme. The strategy, whose title means “with-without” in Latin, took advantage of a loophole in the German tax code on dividend payments.

At the height of the scandal more than a decade ago, bankers and investors quickly traded shares of companies around their dividend payout day, blurring stock ownership and allowing multiple parties to falsely reclaim tax rebates on dividends.

German tax authorities refunded at least €3.9bn in illicit tax refunds between 2001 and 2011, according to the country’s finance ministry.

Germany moved to abolish the strategy in 2012.

Deutsche has been caught up in the scandal for years and settled a separate cum-ex investigation into its role as a custodian bank in the deals in 2018, agreeing to pay €4m to end the case.

The latest raid, which was first reported by local media, comes as prosecutors in Cologne intensify pressure on global banks with around 1,500 people currently under investigation.