| WASHINGTON, Sept 28
WASHINGTON, Sept 28 Germany's Commerzbank
said on Friday it was cooperating with U.S.
prosecutors in a case involving a bank employee charged with
conflict-of-interest violations and exposing an Internal Revenue
"The bank is fully cooperating with the authorities," a
Commerzbank spokeswoman in Germany said by telephone on Friday,
declining to answer further questions.
Dennis Lerner, 59, was arrested on Thursday at his home in
New Jersey, and taken before a judge in Manhattan.
He was charged with violating federal conflict-of-interest
laws and improperly disclosing confidential IRS information,
according to legal documents released on Thursday by U.S.
Attorney for the Southern District of New York Preet Bharara.
Lerner, who was released on bail, could face up to 20 years
in prison, Bharara's office said.
The Commerzbank spokeswoman said on Friday that Lerner was
still employed by the bank.
A man reached by phone at Lerner's home declined to comment.
Jonathan Marvinny, identified as Lerner's attorney in court
documents, could not be reached for comment.
The IRS declined to comment on the bank or the unnamed
whistleblower involved. "We will not tolerate breaches of public
trust by IRS employees," IRS spokesman Terry Lemons said.
Lerner worked as an IRS examiner from June 2010 to August
2011. In that role, he audited an international bank for alleged
underreporting of $1 billion in income, with help from a
confidential whistleblower, said a statement from Bharara and
legal documents based on a probe by the Treasury Inspector
General for Tax Administration, an IRS watchdog unit.
That bank, though unidentified in the legal documents, was
Commerzbank, sources close to the case said.
While he was working at the IRS, Lerner led negotiations
between the agency and the bank on a $210 million proposed
settlement, the documents filed by Bharara said.
Then in September 2011, he abruptly left the IRS and took a
job as North American tax director at the bank.
Despite warnings from the IRS about talking with agency
employees, Lerner subsequently phoned his former colleagues
about the audit. He encouraged IRS employees to conclude the
settlement negotiations, at one point walking in on talks
between agency and bank employees, the documents said.
Lerner also divulged to people not employed by the IRS the
identity of the whistleblower and "details regarding pending IRS
audits of other companies," the documents said.
The Commerzbank spokeswoman declined to comment on the
status of the bank's audit settlement with the IRS.
No public announcement has been made either by the bank or
the IRS of a settlement between them in the case discussed in
the legal documents filed by Bharara.