topnaijanews Stay informed with the latest Nigerian news at your fingertips
The New York-based financial giant provided inaccurate tax advice to customers and potential customers on wire products mainly aimed at small and mid-size businesses, New York tax officials said.
ADVERTISEMENTAmerican Express has agreed to pay more than $138m (€134m) to resolve a wire fraud investigation related to its sales and marketing practices, federal authorities have said.
The New York-based financial giant provided inaccurate tax advice to customers and potential customers on wire products primarily marketed at small and mid-size businesses, the US Attorney for the Eastern District of New York’s office said.
Customers were told, for example, that the company’s fees were tax-deductible as a business expense.
Internal Revenue Service’s special agent in New York Harry Chavis said the company “misled their customers by touting tax breaks that simply didn’t exist”.
Practice discontinued after internal inquiry
Authorities said an internal investigation had led to the axing of approximately 200 employees in 2021, and the company discontinued the products entirely later that year.
“Financial institutions like American Express have no business pitching inaccurate tax avoidance schemes to sell products and turn a quick profit”, said Acting Attorney Judy Philips, representing the US for the Eastern District of New York.
“This resolution ensures that American Express will be held financially accountable for the unacceptable conduct of its sales employees in misrepresenting the tax benefits of these products.”
American Express said that it will pay roughly $230m (€223m) in total to resolve the matter.
“We cooperated extensively with these agencies and our regulators and took decisive voluntary action to address these issues, including discontinuing certain products several years ago, conducting a comprehensive internal review, taking appropriate disciplinary measures, making organisational changes, and enhancing policies, compliance, and training programmes”, the company said in a statement.
Under the terms of the agreement, American Express will pay a $77.7m (€75.6m) criminal fine and forfeit $60.7m (€58.9m), which represents the net revenue attributed to sales of the wire products.
The company has also separately entered a multimillion dollar civil settlement with the US Department of Justice.
