Deutsche Bank’s Office In Israel Raided, Managing Director Arrested Over Tax Violations

By Zero Hedge

Define irony: just three days after Deutsche Bank took out a massive, full-page ad in German media to apologize for its market rigging “misconduct”, Deutsche Bank managing director, Boaz Schwartz, who is also the German lender’s chief executive officer in Israel, was arrested over alleged value-added-tax violations involving the company’s clients, in the latest setback in the German firm’s attempts to end years of legal issues and misconduct,  prompting some to question the sincerity of DB’s solemn “apology.”

Schwartz, suspected of misreporting 550 million shekels ($146 million) of transactions, was arrested on Tuesday Bloomberg reported, a day after tax authorities raided the bank’s offices in Israel, seizing executives’ laptops and mobile phones, according to a statement from the Israel Tax Authority. He was freed under condition by Judge Karen Miller of the Jerusalem Magistrate’s Court. Israeli police had no comment on the executive’s arrest.

The Israel tax authority said that the alleged transactions were reported as if conducted by foreign residents and avoided Israel’s 17-percent VAT. In a statement, Deutsche Bank said it “acts in accordance with the law and strict legal advice both in Israel and abroad”, except when it gets caught?

The rest of the story is familiar: the arrest is the latest scandal to beset the lender struggling to settle lawsuits and rebuild confidence after misconduct costs helped tip Frankfurt-based Deutsche Bank into two years of losses. Legal cases that date back many years cost the company “reputation and trust” in addition to about 5 billion euros ($5.4 billion) since John Cryan took over as chief executive officer in July 2015, the CEO said in in advertisement in German newspapers this weekend, blaming the “misconduct of a few” employees for the transgressions.

Deutsche Bank had 9 million euros ($9.6 million) of revenue in Israel in 2015, which produced a pretax profit of 5 million euros, according to the lender’s annual report. The firm employed 11 workers in the country at the end of 2015, the report shows.

The fact that Israel is cracking down on the German lender, a bank which in the late 1990s admitted and regretted “dealing in nazi gold“, may be worth keeping an eye on.

This article (Deutsche Bank’s Office In Israel Raided, Managing Director Arrested Over Tax Violations) was originally published on Zero Hedge and syndicated by The Event

http://www.theeventchronicle.com/finanace/deutsche-banks-office-israel-raided-managing-director-arrested-tax-violations/