American Express to Pay Over $138 Million to Settle Sales Investigation

New York: So, American Express is in hot water. They’ve agreed to cough up over $138 million to settle a wire fraud investigation. This all came to light when federal authorities found out they were giving out some pretty sketchy tax advice to customers, especially small and mid-sized businesses.

Apparently, they told folks that their fees could be written off as business expenses. But, surprise! Those tax breaks didn’t actually exist. Harry Chavis from the IRS called them out for misleading customers.

Back in 2021, they even had to let go of around 200 employees after an internal probe. They stopped offering those products later that same year. Judy Philips, the acting U.S. Attorney, made it clear that financial institutions shouldn’t be pushing false tax schemes just to make a quick buck.

American Express said they stopped those practices in 2021 and are now looking at a total payout of about $230 million to settle everything. They’ve been cooperating with the authorities and have made some big changes internally, like improving their training and compliance programs.

As part of the deal, they’ll pay a $77.7 million criminal fine and forfeit another $60.7 million, which is what they made from those wire products. Plus, they’ve got a separate civil settlement with the Justice Department. Quite the mess, huh?