• 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

Lyft co-founders to step down from ride-hailing firm’s...

August 16, 2025

Warren Buffett’s Berkshire Hathaway reveals new stake in...

August 16, 2025

Apple Watch getting redesigned blood oxygen feature following...

August 15, 2025

The CEO in chief: How Trump is getting...

August 15, 2025

Ulta and Target will end deal for in-store...

August 15, 2025

Musk threatens ‘immediate’ legal action against Apple over...

August 13, 2025

ESPN, Fox to bundle upcoming streaming services for...

August 12, 2025

What Trump’s Nvidia and AMD China deal means...

August 12, 2025

A top Federal Reserve official says bleak jobs...

August 11, 2025

Bed Bath & Beyond relaunches with first store...

August 9, 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

  • House GOP demands Secret Service director face accountability in new resolution: ‘Must be fired now’

    July 22, 2024
  • Vice President JD Vance to speak at CPAC’s opening day

    February 18, 2025
  • Sen. Steve Daines says regime change is the best long-term plan in Iran

    July 7, 2025
  • Bill Ackman aims for $2 billion in Pershing Square IPO, scaling back from initial $25 billion target

    July 30, 2024
  • Argentina’s Milei rallies Venezuelan opposition despite Maduro’s ‘ugly’ attacks

    August 3, 2024

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 (5,718)
  • Investing (634)
  • Stock (887)

Latest Posts

  • Biden aides ‘scripted’ everything, allowed his faculties to ‘atrophy,’ new book claims

    April 9, 2025
  • Reddit is attracting ad dollars: will RDDT shares rally further in 2025?

    May 3, 2025
  • Trump has the opportunity to stop Iran from going nuclear

    March 14, 2025

Recent Posts

  • Fetterman hails Rubio as ‘strong choice’ for secretary of state, says he will vote to confirm him

    November 12, 2024
  • How USAID went woke and destroyed itself

    February 7, 2025
  • Shutdown fears move House Republicans to protect military paychecks

    September 19, 2024

Editor’s Pick

  • DAVID MARCUS: Musk’s DOGE changed the way America sees federal spending waste

    May 29, 2025
  • US reinforces Central Command with fresh supply of F-16s in ‘ironclad’ commitment to defend Israel

    October 25, 2024
  • IDF conducts strike in Beirut targeting commander behind attack on children’s soccer field

    July 30, 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