The cum-ex scheme was a complex tax evasion scheme that exploited loopholes in the dividend tax system. It involved multiple parties collaborating to exploit differences in tax rules across different countries. The scheme typically involved buying and selling stocks just before the dividend payout date, allowing participants to claim multiple refunds of dividend taxes that were only paid once. Through a series of rapid transactions and the manipulation of paperwork, the scheme generated artificial tax refund claims, resulting in significant financial losses for governments. The cum-ex scheme was widely regarded as a sophisticated and highly organized form of tax fraud, and its exposure led to increased scrutiny and regulatory measures to prevent similar practices in the future.
After the trial, which lasted just under a year, the court considered it proven that the accused tax lawyer Hanno Berger had participated in cum-ex stock deals between 2006 and 2008, which led to unjustified tax refunds of €113 million. He was sentenced to eight years and three months in prison. In 2017, the Attorney General’s Office brought charges against Berger and five former Hypovereinsbank employees from London and Munich for serious tax evasion.
The co-defendants, some of whom had already been convicted, traders at Hypovereinsbank traded shares in Dax companies worth €15.8 billion.
In the closing arguments, the representative of the Frankfurt Attorney General’s Office had demanded a prison sentence of ten years and six months for serious tax evasion. In addition, millions should be confiscated from Berger’s private assets.
Berger’s public defenders, on the other hand, had demanded an acquittal for their client: because, at the time of the commission of the acts, the stock transactions had been legally permissible.
The verdict of the Regional Court is not yet final. Berger will likely appeal the decision, as he did in the case of an earlier conviction. In December 2022, Berger was sentenced to eight years in prison by the Bonn Regional Court for his involvement in other cum-ex transactions.
Therefore, the 72-year-old Berger could face 15 years in prison.
