American Express to Pay $138 Million to Settle Wire Fraud Investigation

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American Express to Pay $138 Million to Settle Wire Fraud Investigation
AMERICAN EXPRESSWIRE FRAUDTAX ADVICE
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American Express has agreed to pay over $138 million to resolve a wire fraud investigation related to its sales and marketing practices. Federal authorities alleged that the company provided inaccurate tax advice to customers, claiming fees were tax-deductible business expenses.

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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 U.S. 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.

“Financial institutions like American Express have no business pitching inaccurate tax avoidance schemes to sell products and turn a quick profit,” Judy Philips, Acting Attorney for the U.S. for the Eastern District of New York, said in a statement. “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.

“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 organizational changes, and enhancing policies, compliance, and training programs,” the company said in a statement.

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AMERICAN EXPRESS WIRE FRAUD TAX ADVICE FINANCIAL INSTITUTIONS SETTLEMENT

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