listen to this articleAmerican Express has agreed to pay more than $138 million in a settlement agreement with the U.S. Attorney’s Office for the Eastern District of New York. The non-prosecution agreement stems from two American Express products, Payroll Rewards and Premium Wire, that authorities say “engaged in sales practices that provided inaccurate tax advice to customers and potential customers.” is related to.
American Express agreed to a $77.6 million fine and $60.7 million forfeiture. The agreement requires the company to cooperate with U.S. prosecutors for at least 36 months. If a company violates the terms of the agreement, it could be prosecuted for conduct that triggered an investigation or for newly discovered criminal conduct.
“Financial institutions like American Express do not intend to sell inaccurate tax avoidance schemes to sell products and make a quick profit,” said Acting U.S. Attorney Judy Phillips in a news release about the settlement. said.
“This resolution ensures that American Express will be held financially responsible for the unacceptable conduct of its sales employees in misrepresenting the tax benefits of these products,” she added. Ta.
“In reality, these products were sold as a means to generate tax savings,” the Justice Department said in a news release. It was sold in
But the company’s pitch “relied on incorrect tax advice” that said wiring charges were “fully deductible as a business expense,” the people said. The company did not consult tax experts about the allegations, the people said.
In early 2021, amid growing concerns about how its products were being marketed, the company launched an internal investigation that ultimately led to the firing of about 200 employees. The company stopped enrolling new customers for the product in summer 2021, according to people familiar with the matter. Through September 2021, there is a cap of $280,000 per transfer. Sales will be completely discontinued as of November 2021.
Officials said American Express had no criminal history in the past 18 years and cooperated with authorities in the investigation.
“We have worked extensively with these government agencies and regulators to discontinue certain products several years ago, conduct comprehensive internal reviews, take appropriate disciplinary actions, make organizational changes, and implement policy, We have taken decisive voluntary actions to address these issues, including strengthening our compliance and regulatory “training programs,” the company said in a statement.
