A lawyer allegedly involved in a scheme to evade €428 million in taxes in Germany will face criminal charges in November, the latest case in the country’s ‘cum-ex’ financing scandal.
The ‘cum-ex’ scandal involved the aggressive manipulation of an apparent loophole in German tax law that allowed participants to claim refunds for taxes they never paid.
Cum-ex transactions involved investors swapping shares back and forth with (“cum”) and without (“ex”) dividend rights around the date dividends are paid.
The apparent loophole was later closed and German courts eventually ruled that the scheme amounted to criminal tax avoidance.
The total tax losses resulting from “cum-ex” schemes are estimated to have cost the government tens of billions of euros in lost revenue.
Prosecutors in Cologne allege the lawyer was “one of the central players in the cum/ex market of German shares” and said he oversaw numerous trades with an alleged accomplice who has already been criminally convicted as part of the scandal.
According to the indictment, the suspect, as an expert in the field of investment law, was particularly involved in setting up complex fund structures.
He is accused of particularly serious tax evasion in eight cases from 2007 to 2015, according to an announcement from the regional court in Bonn, which will hear the case.
Criminal charges were filed against the man more than two years ago and the trial is expected to last until 2025.
