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Penalties and fines are generally not tax deductible. However restitution payments or disgorgement of profits have been deductible expenses in settlements with state and federal regulators. So as long as the Court judgement is clear that the payment is in the nature of restitution and not fines and penalties, these payments would be deductible in the ordinary course of business or as capital expenditure if capital in nature.
Link to one of the case law on this issue-
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