Former IRS Auditor Arrested for Corruption Charges

A former IRS official was arrested this past week for violating federal ethics law and whistleblower protection laws.

According to a complaint filed on September 26th by the US Attorney’s office, Dennis Lerner, 59, was charged with negotiating for employment with Commerzbank, a large German bank, while he was auditing the bank. He is also charged with improperly contacting IRS officials after accepting a position with the bank and releasing the identity of a whistleblower.

The scandal began when a whistleblower told the IRS that the bank had underreported its income by $1 billion. Commerzbank then came under IRS investigation, which Lerner took part in.

The criminal complaint alleges that Lerner had met with Commerzbank officials to negotiate a settlement for the unpaid taxes. Those negotiations led to a settlement of $210 million, which was only 62% of Commerzbank’s potential tax liability for its unreported income. On August 11, just one day after the bank paid the IRS the settlement, Lerner accepted a position with the bank.

After accepting the position Lerner allegedly revealed the name of the whistleblower, saying “Doesn’t it suck that someone you trust would turn their back on you?” Lerner is also charged with contacting his former collegauges at the IRS in order to inquire about the bank’s case, which is unlawful according to federal ethics law. That IRS employee ended up contacting the IRS’ inspector general in order to begin the investigation which resulted in the criminal charges Lerner faces today.

After Lerner’s arrest he was released on a $300,000 personal recognizance bond. If found guilty on all 4 charges Lerner could face 20 years in federal prison.

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