FRANKFURT – German lawyer Hanno Berger, the alleged mastermind of a tax scandal dubbed “cum-ex” that cost the government billions of euros, went on trial in Bonn today.
After losing a battle against his extradition from Switzerland, Berger appeared in the dock at the district court in the western city to face charges of aggravated tax fraud.
Cologne prosecutors accuse the 71-year-old of helping to arrange fraudulent transactions at German bank M.M. Warburg between 2007 and 2011 that cost the treasury €278 million (RM1.29 billion).
First exposed in 2017, the “cum-ex” scam involved numerous participants swiftly exchanging company shares amongst themselves around dividend day, in order to claim multiple tax rebates on a single payout.
Used across Europe, the scheme is estimated to have left a multi-billion-euro hole in Germany’s public finances. The Handelsblatt financial daily put the figure as high as €30 billion.
In Germany, a change to the tax law in 2012 closed the loophole that enabled the practice.
Dozens of people have been indicted over the scandal in Germany, including bankers, stock traders, lawyers and financial consultants.
A former top executive at M.M. Warburg, Christian S., last year became the first person to receive jail time over the scam.
He was sentenced to five and a half years imprisonment after judges found him guilty of covering up tax operations that he knew were illegal.
Berger, dubbed “Mr Cum-Ex” by German media, was arrested in July 2021 in the eastern Swiss canton of Graubuenden on a German warrant.
Following a failed legal bid to prevent his extradition, Berger was handed over to German authorities in February, paving the way for his trial.
Berger will also appear before a court in Wiesbaden from next week to answer charges of causing tax damages of around €113 million, after prosecutors in the two German regions failed to agree to merge the two trials.
Prosecutors in the second case accuse Berger of obtaining false certificates between 2006 and 2008 for capital gains taxes that were never actually paid. – AFP, April 4, 2022
