US-based Mellon Bank has agreed to a settlement with federal prosecutors over the destruction of thousands of federal tax returns and payment cheques by employees at its Internal Revenue Service (IRS) processing unit in Pittsburgh.
Under the agreement with the US Attorney for the Western District of Pennsylvania, Mellon has accepted responsibility for the conduct of its employees and agreed to fully cooperate with an investigation into the destruction of the documents, which occured in April 2001.
Around 77,000 federal income tax returns and tax-payment cheques were thought to have been destroyed at the IRS centre by over-worked bank staff. According to press reports, staff at the unit were put under increasing pressure after the department fell behind in processing the paper by an April deadline.
Mellon has said that that no taxpayers were harmed, and there was no evidence of cheque fraud or identity theft.
In today's statement, the bank says no penalties or fines were imposed, but it will reimburse the federal government $30,000 for costs incurred by an outside vendor.
In March 2005 several bank employees were indicted in connection with the destroyed returns and payments, while in January a former bank manager pleaded guilty to theft of government property and agreed to help prosecutors in the remaining cases. Six other former Mellon workers have also been indicted.