Crime: procedural error: Berger lawyer wants to overturn cum-ex judgments

Crime: procedural error: Berger lawyer wants to overturn cum-ex judgments

The most prominent figure in the cum-ex scandal is defending itself against being sentenced to a long prison term. Berger relies on a renowned lawyer. He concentrates on the decision about Berger’s extradition.

The key figure in the billion-dollar cum-ex tax scandal, Hanno Berger, wants to avert years of imprisonment for procedural errors. In the appeal requested at the Federal Court of Justice (BGH), his lawyer Jürgen Graf is counting on the fact that the guilty verdicts by German courts against Berger are incompatible with the Swiss extradition notice of 2021. If that is the case, the judgments of the Bonn and Wiesbaden regional courts would be dropped and Berger could leave, said Graf of the German Press Agency. In addition to this extradition aspect, the defense attorney also puts forward other substantive points in order to be successful before the BGH.

Berger is the most prominent figure in the cum-ex stock deal tax evasion scandal. The 72-year-old fled from the German judiciary to Switzerland at the end of 2012 and had evaded a trial in Germany for years. In February 2022 he was transferred to Germany, where he was sentenced to eight years in prison for tax evasion by the Bonn Regional Court and eight years and three months by the Wiesbaden Regional Court. In the Bonn proceedings, the tax damage caused by Berger’s actions was estimated at 276 million euros and in Wiesbaden at 113 million euros.

The two judgments against Berger can subsequently be offset against a total penalty. Then he faces up to 15 years in prison. For this to happen, however, the judgments must be final. Berger is in the Frankfurt-Preungesheim prison, according to his lawyer he has health problems. It is still unclear when the BGH will decide on the appeal against Berger’s conviction.

Berger was the driving force behind the cum-ex deals

In his argumentation, Graf refers to the “principle of specialty”, according to which a conviction may only be made within the framework specified in the extradition notice. That is exactly what Graf, who used to be a BGH judge himself and most recently deputy chairman of the 1st Criminal Senate, doubts. Because the allegations of deception and malice mentioned in Switzerland’s decision, which were decisive for the extradition as characteristics of “common law fraud”, did not appear in the Bonn judgment at all.

“This makes it questionable whether the Swiss extradition notice was satisfied.” The Wiesbaden judgment is not yet available in writing. Tax evasion is not a reason for extradition in Switzerland, but fraud under common law – i.e. fraud on the state – is. If, in retrospect, it turns out that the German judgments were only about tax evasion and not about the characteristics of fraud under common law, the extradition should never have taken place, argues Graf.

Berger is considered the architect and driving force of the cum-ex deals, with which banks and investors cheated the state by an estimated at least ten billion euros. Around the dividend record date, shares with (“cum”) and without (“ex”) dividend rights were pushed back and forth between several participants. At the end of the confusion, tax offices reimbursed capital gains taxes that had not been paid at all. In 2012 the tax loophole was closed. For a long time it was unclear whether cum-ex deals were just immoral or illegal. In 2021, the Federal Court of Justice then classified it as tax evasion.

Source: Stern

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