Germany issues first jail sentence over ‘cum-ex’ tax fraud – Times of India


BERLIN: A former top executive of private German bank M.M. Warburg was sentenced Tuesday to five-and-a-half years in prison for tax evasion, the first jail time handed out over the huge “cum-ex” tax fraud scandal.
Christian S., a former right-hand man of Warburg’s director, was found guilty of five counts of “aggravated tax fraud,” the court in Bonn told reporters.
The court ruled that between 2006 and 2013 the banker covered up tax operations that he knew were illegal.
First exposed in 2017, the “cum-ex” scam involved numerous cooperating participants quickly exchanging stock in companies amongst themselves around dividend day, in order to claim multiple tax rebates on a single payout.
Used across Europe, the scheme left a 5.5 billion-euro ($6.7-billion) hole in Germany‘s public finances, according to estimates published by the government in September.
In Germany, a change to the tax law in 2012 closed the mechanism exploited by the practice.
Several banks suspected of being linked to the scandal have been raided in recent months, including Deutsche Bank, Commerzbank and a subsidiary of Clearstream in Frankfurt.
Two British former investment bankers were given suspended sentences by a German court in March last year as part of a landmark trial into the vast scandal.





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