A German court has sentenced lawyer Hanno Berger, the alleged mastermind of the sprawling 'cum-ex' tax-fraud scandal that cost the German tax authorities billions of euros, to eight years in prison.
The 72-year-old former tax officer had been arrested in the summer of 2021 in Switzerland, where he had taken up residence after investigators first became interested in him. Germany requested and obtained his extradition.
Berger, whose actions date back to between 2007 and 2011, faced a maximum of 15 years’ imprisonment. The public prosecutor asked for nine.
The defence acknowledged that its client had made a mistake, but pointed out that the consequences were far less serious than the prosecution had suggested.
Hanno Berger was on trial for his role as architect of a gigantic tax fraud that wronged not only the German tax authorities but also investors in so-called 'cum-ex' transactions. An estimate by the German Ministry of Finance had put the total loss to the state coffers at €5.5 billion.
The cum-ex tax fraud involved a network of banks, stock traders, and lawyers who obtained billions from European treasuries through suspected fraud and speculation involving dividend taxes.
The participants in the network would lend each other shares in large companies, so that to tax authorities there would appear to be two owners of the shares, when there was only one.
The bank that was used in stock trading would then issue a 'confirmation' to the investor that tax on the dividend payment had been paid, without it being done.
