• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Stock

American Express to pay $230 million to settle DOJ fraud probe, deceptive marketing claim

by January 17, 2025
written by January 17, 2025

American Express will pay a total of about $230 million to resolve federal wire fraud investigations, and to settle civil allegations of deceptive marketing, the company said Thursday.

The tally includes more than $138 million as part of a non-prosecution agreement with the U.S. Attorney’s Office in Brooklyn, New York, related to allegations that American Express gave customers “inaccurate tax advice” for two wire products.

Separately, the banking giant will pay $108.7 million to resolve civil claims by the Department of Justice’s Civil Division that it deceptively marketed credit cards to small businesses, among other allegations.

Amex said it has also reached an “agreement in principle with the Staff of the Board of Governors of the Federal Reserve System,” which it expects to finalize in the coming weeks.

“Pursuant to the agreements and after crediting, American Express will pay approximately $230 million in total to resolve these matters,” Amex said.

The big settlement follows recent agreements by other large companies, including Mastercard and Block, to settle claims from prosecutors or regulators.

“American Express misled their customers by touting tax breaks that simply didn’t exist,” said Harry Chavis, special agent in charge for the IRS’s New York criminal investigation division in New York, in a statement.

Chavis said, “This deceitful marketing campaign … involved hundreds of employees defrauding their customers and the government.”

Prosecutors said in a press release that Amex — in 2018 and 2019 — launched the wire products Payroll Rewards and Premium Wire, which were “marketed as a means to generate tax savings.”

Customers, which primarily included small- and mid-sized businesses, were told that the fees from the wire payments were tax-deductible as a business expense and that the customers otherwise would have paid taxes on the fees, prosecutors said.

Customers also were told that “Membership Reward” points, received in exchange for the transactions, were earned tax-free, and therefore outweighed the true cost of the fees.

But that pitch “relied on incorrect tax advice, namely, that the wiring fee was deductible in its entirety as a business expense,” prosecutors said.

“Incurring a wiring fee—far in excess of that offered by competitors in the marketplace—for the purpose of generating a personal benefit is not an ‘ordinary’ and ‘necessary’ business expense,” as is required, they said.

An internal investigation into those marketing practices in early 2021 led to about 200 employees being fired, prosecutors said. By November of that year, the two products were discontinued entirely.

The separate civil settlement announced Thursday centered on allegations that AmEx “deceptively marketed credit cards” through “an affiliated entity that initiated sales calls to small businesses.”

The practices, which took place from 2014 through 2017, included “misrepresenting the card rewards or fees” and “whether credit checks would be done without a customer’s consent,” the DOJ said.

The practices also allegedly included “submitting falsified financial information for prospective customers, such as overstating a business’s income.” 

Amex also allegedly tried to “deceive its federally insured financial institution” to let small-business customers acquire credit cards without the legally required employer identification numbers — known as EINs.

“The United States alleged that American Express employees used ‘dummy’ EINs such as ’123456788′ in opening small business credit cards in 2015 and the first half of 2016,” the DOJ said.

Amex’s settlement agreement with the DOJ’s Civil Division does not include an admission of liability or wrongdoing by the company, which denied the allegations about the EINs and deceptive credit card sales practices.

“When financial companies engage in deceptive sales tactics or falsify information to cover up a failure to follow applicable regulations, they threaten the integrity of our financial system,” principal deputy assistant Attorney General Brian Boynton, head of the Civil Division, said in a statement.

“Today’s settlement makes clear that the department will hold accountable those who violate the trust placed in them to follow the rules governing our financial institutions and to be truthful about their business practices,” Boynton said.

This post appeared first on NBC NEWS
0 comment
0
FacebookTwitterPinterestEmail

previous post
Comer requests Trump DOJ prosecute James Biden for making ‘false statements’ during impeachment inquiry
next post
Biden is on the way out and Trump is taking the wheel. Welcome back, America

related articles

Convenience stores are eating fast-food chains’ breakfast

September 15, 2025

Trump administration ramps up pressure on Labor Department...

September 11, 2025

Kenvue stock drops 10% on report RFK Jr....

September 8, 2025

Mortgage rates see biggest one-day drop in over...

September 5, 2025

Paramount mandates 5-day-a-week return to office ahead of...

September 5, 2025

Apple has survived Trump’s tariffs so far. It...

September 4, 2025

Trump family’s American Bitcoin makes stock market debut

September 4, 2025

Disney to pay $10 million to settle FTC...

September 4, 2025

Crash victims’ families prepare to make what could...

September 3, 2025

Amazon cracks down on Prime free shipping sharing

September 3, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • RIL set to end 2024 in red for the first time in a decade: what investors need to know

    December 17, 2024
  • Tesla stock jumps 3.4% in premarket trading as analyst sees over 45% upside

    March 3, 2025
  • AG Bondi says violent anti-Israel student protesters in US on visas ‘need to be kicked out’

    February 21, 2025
  • Lego hits record revenue in first half of 2025, boosted by brick flowers and cars

    August 28, 2025
  • Danish official strikes back at Vance’s Greenland comments: ‘We do not appreciate the tone’

    March 30, 2025

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 3

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 4

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (6,041)
  • Investing (634)
  • Stock (925)

Latest Posts

  • Defense Department workers no longer required to submit DOGE’s weekly production reports

    May 28, 2025
  • Best gold stocks and ETFs to buy as its price surges

    April 22, 2025
  • Task force to expose ‘federal secrets’ on JFK assassination, Epstein, UFOs packed with GOP rebels

    February 18, 2025

Recent Posts

  • Barrett eviscerates Jackson, Sotomayor takes on a ‘complicit’ court in contentious final opinions

    June 27, 2025
  • Republicans say they’re ‘out of the loop’ on Trump’s $400M Qatari plane deal

    May 14, 2025
  • Trump opens door to 600,000 Chinese students amid Beijing trade talks

    August 26, 2025

Editor’s Pick

  • New Hur interview tapes detailing Mongolia trip shed light on Hur’s ‘sympathetic’ characterization of Biden

    May 17, 2025
  • Biden stages hour-long press conference, takes multiple questions in bid to allay fears over mental decline

    July 12, 2024
  • Exclusive: Hamas document reveals devious paraglider terrorism attack plan

    August 12, 2024
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock