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Ex-Deutsche Bank broker’s U.S. tax charges could be dropped in deal

NEW YORK (Reuters) – A former Deutsche Bank AG broker accused of participating in the largest tax fraud in U.S. history has reached a deal with federal prosecutors approved by a judge on Monday that could result in charges being dropped in a year.

A U.S. prosecutor disclosed in court that his office had reached a deferred prosecution agreement with David Parse, whose 2011 conviction on charges including mail fraud was overturned by a federal appeals court in January.

Rather than re-try Parse, prosecutors have agreed that charges would be dismissed in one year if he complies with various terms, Assistant U.S. Attorney Stanley Okula said. U.S. District Judge Laura Taylor Swain approved the deal in court.

Parse, 54, was indicted in 2009 for playing a role in what prosecutors said was a tax shelter scheme orchestrated by Paul Daugerdas, a partner at the law firm Jenkens & Gilchrist, that generated more than $7 billion in fraudulent tax deductions.

The agreement marked a setback for prosecutors, who secured eight trial convictions or guilty pleas in the case but who also experienced two acquittals, including of another former Deutsche Bank employee, Raymond Brubaker.

Barry Berke, a lawyer for Brubaker who Parse later hired after winning his conviction’s reversal, said Parse was pleased the charges would be dismissed.

“David and his family have never wavered in their belief in his innocence, and he had the courage to persevere through this long and unfortunate ordeal,” Berke said in a statement.

A spokesman for Manhattan U.S. Attorney Preet Bharara had no immediate comment.

Parse was convicted in 2011 along with Daugerdas; Denis Field, accounting firm BDO Seidman’s former chief executive; and former Jenkens partner Donna Guerin. Brubaker was acquitted in that trial.

U.S. District Judge William Pauley later ordered new trials for Daugerdas, Field and Guerin after determining a woman had lied to get on the jury. Pauley denied Parse’s bid for a new trial, finding his lawyers knew or suspected the juror lied, and sentenced Parse to 3-1/2 years in prison.

The 2nd U.S. Circuit Court of Appeals in January reversed Pauley’s decision.

Guerin pleaded guilty ahead of her retrial and was sentenced to eight years in prison. Field was acquitted in the second trial, while Daugerdas was convicted and sentenced to 15 years.

Jenkens & Gilchrist dissolved in 2007 after agreeing to pay $76 million to the Internal Revenue Service. Deutsche Bank in 2010 agreed to s $553 million settlement with the U.S. Justice Department.

The case is U.S. v. Parse, U.S. District Court, Southern District of New York, No. 09-cr-00581. (Reporting by Nate Raymond in New York; Editing by Will Dunham)

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