ABUSE OF STRUCTURED FINANCIAL PRODUCTS- Misusing Basket Options to Avoid Taxes and Leverage Limits MAJORITY AND MINORITY STAFF REPORT

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Jürgen Fitschen and Anshu Jain are the current co-Chief Executive Officers of Deutsche
Bank and were appointed to those positions in 2011. 108 Mr. Jain was previously head of
Deutsche Bank’s investment banking group. 109 In the United States, Jacques Brand has been the
Chief Executive Officer of Deutsche Bank in North America since 2012. 110 He was previously
the Global Head of Investment Banking Coverage & Advisory in Deutsche Bank’s Corporate
Banking & Securities division. 111
Deutsche Bank Non-Prosecution Agreement. About ten years ago, Deutsche Bank
became the subject of a series of investigations focused on its participation in abusive tax
shelters from 1996 through 2002, which aided and abetted evasion of an estimated $5.9 billion in
U.S. income taxes. 112 On December 21, 2010, Deutsche Bank and the U.S. Attorney for the
Southern District of New York executed a non-prosecution agreement (NPA) related to the
bank’s involvement with the abusive tax shelters. 113 Under the agreement, the bank paid more
than $550 million to the United States, 114 and the U.S. Attorney and the U.S. Department of
Justice (DOJ) agreed not to prosecute Deutsche Bank criminally for participating in abusive tax
shelters benefiting its clients from 1997 to 2005, provided the bank meet certain requirements. 115
Those requirements included Deutsche Bank’s continued cooperation with the DOJ in its
tax shelter prosecutions, and appointment of an independent expert to oversee bank reforms to
ensure the bank stopped participating in transactions used to defraud the IRS. 116 The NPA also
banned Deutsche Bank's involvement with any pre-packaged tax products, which were the type
of tax shelters that led to the criminal proceedings. 117 Bart Schwartz was selected to serve as the
independent expert to monitor Deutsche Bank’s actions. 118 In that position, Mr. Schwartz was
responsible for evaluating the implementation and effectiveness of the bank’s compliance
108 “Deutsche Bank Names Co-C.E.O.’s to Succeed Ackermann,” The New York Times, Jack Ewing (7/25/2011),
http://dealbook.nytimes.com/2011/07/25/deutsche-bank-taps-co-ceos-to-replace-ackermann/.
109 Id.
110 11/1/2012 “Deutsche Bank appoints Jacques Brand and Bill Woodley as CEO and Deputy CEO of North
America,” prepared by Deutsche Bank, https://www.db.com/medien/en/content/3862_4221.htm.
111 Id.
112 12/21/2010 letter from Preet Bharara, United States Attorney, to Deutsche Bank’s outside counsel, “Deutsche
Bank AG – Non-Prosecution Agreement,” at 1,
http://www.gibsondunn.com/publications/Documents/DeutscheNPA.pdf. See also “U.S Tax Shelter Industry: The
Role of Accountants, Lawyers, and Financial Professionals,” U.S. Senate Permanent Subcommittee on
Investigations, S. Hrg. 108-473 (Nov. 18 and 20, 2003).
113 12/21/2010 letter from Preet Bharara, United States Attorney, to Deutsche Bank’s outside counsel, “Deutsche
Bank AG – Non-Prosecution Agreement,” at 1,
http://www.gibsondunn.com/publications/Documents/DeutscheNPA.pdf.
114 The $553,633,153 payment represented the fees Deutsche Bank earned from its participation in the tax shelter
activity, the amount of taxes and interest the IRS was unable to collect from the taxpayers because of Deutsche
Bank’s activity, and a civil penalty of more than $149 million. 12/21/2010 “Deutsche Bank to Pay More Than $550
Million to Resolve Federal Tax Shelter Fraud Investigation,” U.S. Attorney for the Southern District of New York
Press Release, at 1, http://www.justice.gov/tax/usaopress/2010/deutschebankpr.pdf.
115 12/21/2010 letter from Preet Bharara, United States Attorney, to Deutsche Bank’s outside counsel, “Deutsche
Bank AG – Non-Prosecution Agreement,” at 1-6,
http://www.gibsondunn.com/publications/Documents/DeutscheNPA.pdf.
116 12/21/2010 “Deutsche Bank to Pay More Than $550 Million to Resolve Federal Tax Shelter Fraud
Investigation,” U.S. Attorney for the Southern District of New York Press Release, at 1,
http://www.justice.gov/tax/usaopress/2010/deutschebankpr.pdf.
117 Id.
118 Id. at 2.