March 3, 2024
German officials conducted a raid on JPMorgan Chase offices in Frankfurt this week as part of its sprawling inquiry of a multibillion tax scandal, a spokesperson confirmed.

German officials conducted a raid on JPMorgan Chase offices in Frankfurt this week as part of its sprawling inquiry of a multibillion tax scandal, a spokesperson confirmed.

The raid pertains to the so-called “cum-ex” scandal, which stems from the Latin words for “with” and “without,” in which participants exploited flaws in the German tax code to bamboozle the government into paying them refunds on taxes that were never paid.

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“We can confirm that our Frankfurt offices were visited this week. We continue to cooperate with the German authorities on their ongoing investigation,“ a JPMorgan Chase spokesperson told the Washington Examiner.

Prosecutors confirmed that a search on an unnamed bank began Tuesday and coincided with the search of an auditing firm not targeted by the inquiry and the homes of four suspects, Bloomberg reported. The raid was intended to retrieve emails and written material, prosecutors added.

German investigators have apparently conducted similar searches at competitors of the financial behemoth. During the scheme, which the German government subsequently deemed tax fraud and outlawed in 2012, German taxpayers lost an estimated 10 billion euros ($10 billion) worth of revenue, according to the report. It was one of the nation’s largest financial scandals.

Participants exploited a flaw in the German tax code by lending shares of companies to each other to give the appearance that there were multiple owners of a given share, per the Financial Times. These shares were cited as proof that a participant paid taxes on dividend payments when, in reality, the participant didn’t pay taxes nor own the actual shares.

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JPMorgan Chase is the largest nongovernment U.S. bank in terms of balance sheet, according to Insider Intelligence. German branches of some of its competitors, such as Bank of America, Barclays, and Morgan Stanley, have also been searched by German authorities in recent months during the inquiry, Reuters reported.

The inquiry entails some 1,000 suspects and spans nearly 100 banks scattered across four continents, German authorities say.

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