Wells Fargo Executives Face Shareholder Suit Over Alleged 'Sham' Tax Shelters

Wells Fargo Executives Face Shareholder Suit Over Alleged 'Sham' Tax Shelters

Kate Moser
The Recorder
January 25, 2010
 

Cotchett, Pitre & McCarthy filed a shareholder complaint Thursday against executives and directors of Wells Fargo, accusing them of turning a blind eye to the banking giant's alleged use of "sham" tax shelters.

Filed in San Francisco Superior Court, the complaint alleges that Wells Fargo officials allowed the bank to avoid paying millions of dollars in federal income taxes by buying equipment from public entities and leasing it back to them. At the same time, the suit claims, Congress and the IRS were challenging these kinds of tax shelters.

"Simply stated, this conduct exemplified bad corporate citizenship that was blatantly abusive and rotten to the core," the complaint said.

A Wells Fargo spokesperson said the bank hadn't yet reviewed the suit and didn't have a comment.

In its complaint, Cotchett Pitre quotes extensively from a Jan. 8 opinion in a Wells Fargo tax refund lawsuit before the U.S. Court of Federal Claims, where Judge Thomas Wheeler wrote, for example, that, "A cadre of company executives, in concert with teams of well-known legal and accounting firms and other consultants, regularly constructed and participated in these tax schemes for Wells Fargo, apparently blind to professional standards of care."