Ex-banker convicted in massive German tax evasion scheme

Jun 1, 2021, 1:02 PM | Updated: 4:32 pm

BERLIN (AP) — A court in Germany convicted a former private banker of five counts of tax evasion Tuesday in a case linked to a far-reaching scheme involving hundreds of suspects.

The regional court in Bonn sentenced the defendant, a former employee of Hamburg-based bank M.M. Warburg, to five years and six months in prison and ordered him to repay 100,000 euros ($122,000). Due to the length of the proceedings, the court credited the banker time months of time served.

A court spokesperson, Saskia Wielpuetz, said the verdict can be appealed.

The defendant, whose name wasn’t released for privacy reasons, allegedly took part in so-called cum-ex transactions in which participants loaned each other shares to collect reimbursement for taxes they hadn’t paid.

Hundreds of bankers allegedly were involved in the scheme and reportedly defrauded taxpayers of billions of euros. Opposition parties have accused the German government of for many years turning a blind eye to legal loopholes that made the cum-ex transactions possible.

Warburg said in a statement that the Bonn court’s verdict would have no economic impact on the banking group. The bank has filed legal appeals challenging decisions by German tax authorities’ holding it liable for tax repayments.

Warburg is also demanding compensation from the individuals allegedly involved in the scheme and denies wrongdoing.

A related trial in Bonn last year resulted in suspended sentences for two British bankers after they agreed to provide detailed information about the fraud scheme.

Numerous further trials against bankers and lawyers allegedly involved in the scheme are expected.

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Ex-banker convicted in massive German tax evasion scheme