Damage of over 45 million: New Cum-Ex trial in Frankfurt: Fund manager in court

The next trial in the billion-dollar tax scandal involving cum-ex share transactions has begun at the Frankfurt regional court. Two fund managers have been in court since Thursday on suspicion of tax evasion in two particularly serious cases, a spokesman for the Frankfurt Public Prosecutor’s Office said.

She filed charges against the two Germans last December. According to previous information, they are accused of having taken part in cum-ex deals in a “gang-like structure” in consultation with other accomplices in 2008 and 2009. The aim was to illegally obtain a refund of capital gains tax from the state.

Millions in profits from illegal businesses

The group’s deals are said to have caused tax damage to the tax authorities of over 45 million euros, according to the public prosecutor’s office. According to a report in the “Handelsblatt”, the two men are said to have each earned over one million euros from the stock transactions.

According to the Attorney General’s Office, the accused used a fund company they ran based in Gibraltar for stock transactions “within artificially created trading chains with the aim of bringing about unlawful tax credits.” In the Cum-Ex scene, people spoke of “voucher printing”, a derisive term for an easy tax certificate.

If convicted, the men from Frankfurt and nearby Neu-Isenburg face prison. According to a spokesman for the regional court, trial dates are scheduled until January 2026.

This is the second charge in the case surrounding the Benelux bank Fortis, in which a managing director was sentenced to three years and three months in prison in November 2023.

Cum-Ex biggest tax scandal in the Federal Republic

Cum-ex deals by banks and investment companies caused the German state an estimated tax loss of at least ten billion euros. In the transactions that had their peak period from 2006 to 2011, investors had capital gains tax paid on dividends reimbursed several times with the help of banks.

Around the dividend record date, shares with and without dividend entitlement were moved back and forth between those involved. In the end, tax offices refunded taxes on dividends that had not been paid.

Politicians only reacted with a change in the law in 2012. In 2021, the Federal Court of Justice decided that cum-ex transactions should be viewed as tax evasion. The Cum-Ex fraud is considered the largest tax scandal in the Federal Republic. Gradually, more and more defendants were convicted, including the key figure Hanno Berger.

Announcement from the Attorney General’s Office December 12, 2024