When news first broke of a dawn raid at Deutsche Bank’s headquarters in Frankfurt, it seemed the bank might narrowly escape the scandal this time. The Frankfurt-based financial institution put out a statement saying the raid was to investigate customers – not the bank’s own employees.
Now it has emerged that Germany’s largest bank, while not directly the focus of investigators, was more deeply entangled in the questionable tax deals brokered by a client than previously believed.
The case involves dividend stripping, a form of tax fraud that prosecutors across the country have been cracking down on over the last few years.
According to information received by Handelsblatt, Tuesday’s raid by the public prosecutor’s office was targeting possible tax fraud conducted by the fund company Nummus Financial. The fund was a customer of Deutsche Bank. The bank, documents show, was aware and likely profited from the fund’s questionable dealings.
In total 10 locations, including offices and homes of various companies across the country, were searched by the authorities on Tuesday, looking for information on Nummus’ alleged dealings. About 70 officials were involved, including federal police, tax authorities, and prosecutors.
The fund is at the center of the latest investigation into a form of alleged tax fraud known as dividend stripping, which has also engulfed a number of other German banks and funds, including Germany’s third-largest bank HypoVereinsbank, now owned by Italy’s Unicredit.
Over just one four-month period, Nummus bought and then immediately resold shares worth €4 billion. The action was designed to avoid paying tens of millions in taxes.