Ex-Commerzbank Official Gets Probation in IRS Case

A former U.S. Internal Revenue Service employee was sentenced to three years’ probation for passing information about a tax-fraud audit to Commerzbank AG while he was working to get a job with the Frankfurt-based bank.

Dennis Lerner, 60, pleaded guilty in March to a count of criminal conflict of interest and illegally disclosing federal income-tax information. Prosecutors said that while he was managing an IRS audit of Commerzbank and involved in negotiating a $210 million settlement of tax-fraud charges, he sought a job with the company.

Prosecutors said that the U.S. was investigating Commerzbank in connection with about $1 billion in allegedly unreported income and that shortly after an accord was reached, Lerner left his position and “immediately after resigning” began working at Commerzbank as its tax director.

“I apologize for my actions,” Lerner told U.S. District Judge John Keenan in Manhattan today before sentence was imposed. “I apologize to my family and loved ones. I apologize for the pain and suffering I brought upon them. I apologize to the government -- they put their trust in me to do a job and I used very, very poor judgment.”

“You sure did,” the judge replied. “You’re an intelligent fellow with a master’s degree and used the judgment that some teenager would do.”

Ill Health

Keenan, who also ordered Lerner to pay a $10,000 fine, said that among the factors he considered in fashioning a sentence were Lerner’s severe diabetes and a heart condition that required quadruple bypass surgery. U.S. probation officials also recommended probation, Keenan said.

Lerner’s lawyer, Sharon McCarthy, sought probation for her client, calling his actions “a series of bad judgment calls.”

Assistant U.S. Attorney Randall Jackson said that prison was warranted and that U.S. sentencing guidelines recommend a term of four to 10 months in prison.

“I don’t think it’s quite complete to describe Mr. Lerner’s activities simply as ‘mistakes in judgment,’” Jackson said. The IRS’s discussions with the bank were “extraordinarily sensitive” when Lerner solicited a job with the company, he said. “It was a tremendous betrayal of trust.”

Margarita Thiel, a Commerzbank spokeswoman, declined to comment on Lerner’s sentencing.

The case is U.S. v. Lerner, 12-cr-00952, U.S. District Court, Southern District of New York (Manhattan).

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