Prosecutor pursues PwC partners in Spain for tax fraud

Those named face jail terms of up to 14 years and heavy fines

The Anticorruption Prosecutor’s Office has initiated proceedings against 61 partners and former partners of the consultant PricewaterhouseCoopers (PwC)’s Spanish arm for alleged tax fraud in connection with the sale in 2002 of PwC’s consulting division to IBM for $3.5 billion (2.6 billion euros).

In a writ posted with the High Court, the prosecutor, who began his probe in 2008, also names a number of PwC units in Spain and IBM Global Services España.

The prosecutor alleges that the 61 partners and ex-partners failed to declare 20.9 million euros of a bonus paid to them in January and instead included the amount in the sum received from IBM from the sale 10 months later of the consulting business, the proceeds from which were taxed at a lower rate.

The prosecutor also claims that PwC SL failed to declare the income it received from the sale of the consultant business to IBM and in so doing allegedly defrauded the tax agency of 18.3 million euros.

The prosecutor has asked for prison sentences of up 14 years and six months for former PwC España Chairman Miguel Fernández de Pinedo, the former manager of the consulting division, José María Tajadura Garrido, and the former partner responsible for the consultant’s tax and legal division, César Rodríguez Ramos. They also face fines of over 102 million euros.

PwC has issued a statement “totally denying” the prosecutor’s allegations, insisting that its actions were completely in line with the law.

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