Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

German cum-ex mastermind handed 8-year jail sentence for tax fraud

German cum-ex mastermind handed 8-year jail sentence for tax fraud

A tax lawyer, alleged to have masterminded one of Germany's biggest post-war frauds, was sentenced to eight years in jail on Tuesday after a landmark trial that has gripped the country.
Hanno Berger, a 72-year-old former tax inspector turned legal tax expert, is the most high profile professional to be convicted after sprawling investigations into the cum-ex dividend stripping scheme, which some experts estimate has cost German taxpayers around 10 billion euros ($10.5 billion).

Berger, who fled to Switzerland in 2012 before being extradited to Germany in February, was also ordered to repay more than 13 million euros as he became the 11th man convicted in Germany over the scandal after an eight-month trial.

Germany and Denmark are leading cross-border investigations into the trading scheme, which involved banks and investors claiming multiple bogus tax rebates on dividends, aided by now-closed loopholes in their tax systems and the failure of authorities to spot and halt the practice.

Berger's sentence is the longest to date after around eight years of investigations that government officials say span around 1,500 suspects and 100 banks on four continents.

In closing arguments at the Bonn court last week, prosecutors accused Berger of orchestrating tax scams that siphoned 278 million euros from German taxpayers.

Berger rejected accusations of tax fraud, although he conceded he should have paid better heed to a 2009 finance ministry letter that expressed concerns about the "tax optimisation scheme". He also insisted some transactions were legal at the time.

Judge Roland Zickler said the case turned on a particularly serious form of white-collar crime, labelling Berger "the inventor of cum-ex 2.0" because his schemes were so prolific.

"You were right at the centre," he told Berger.

Richard Beyer, a lawyer representing Berger, said his client would study the judgment before deciding his next steps.

MILKING THE STATE

Prosecutors said Berger designed and promoted the cum-ex scheme, defrauding the German state and profiting, along with a colleague, of 27.3 million euros between 2007 and 2013.

Berger is on the hook for half. The former colleague, who cannot be named for legal reasons, is due to pay the remainder, although the court heard that his efforts to pay his share have been partly blocked by a bank on compliance grounds.

The scheme, which flourished after the 2008 credit crisis, involved the rapid dealing of company shares around dividend payout days, blurring stock ownership and allowing multiple parties to claim rebates.

The scandal has sparked a public and political outcry as ordinary Germans face a cost-of-living crisis.

Authorities have raided the German branches of companies including Barclays (BARC.L), Bank of America (BAC.N), JP Morgan and Morgan Stanley in their investigations. All four banks have said they are cooperating with inquiries.

In September, Bank of New York Mellon Corp (BK.N), Germany's Warburg Group and Deutsche Bank (DBKGn.DE) said they would pay a combined 60 million euros to tax authorities over the scandal.

Berger has also been charged by Frankfurt prosecutors over another alleged cum-ex tax fraud, valued at 113 million euros, with a trial in the city of Wiesbaden which is expected to reach a verdict next year.

"Even if there are those who might have wished for a longer sentence, the key takeaway today is that the law is more powerful than criminal money," said ex-lawmaker Gerhard Schick, who instigated a parliamentary inquiry into the scandal.

($1 = 0.9484 euros)
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
×