TWO British bankers have been found guilty of tax evasion in what is believed to be Germany’s biggest post-war fraud trial with the guilty parties defrauding the government of €447 million.
They have received suspended sentences from the court in Bonn but one of them has also been fined €14 million for his part in the crime.
This incredible scam is known as the cum-ex trade (similar in some ways to the Carousel frauds over vat in the UK) but was carried out on more than 30 occasions.
They basically employed multi-billion-euro trades to allow them to file bogus tax claims and ran this from 2005 until 2011 with particular success during the financial crisis.
The trial had been underway for several months but was brought to an abrupt end with the convictions due to the current coronavirus outbreak.
Although others were involved in operating the scam, these two were considered to be the brains behind the entire operation and the court wanted to at least see their trial finished but the trial of the others is likely to continue at some time in the future.
One of the two men who used Gibraltar-based investment vehicle Ballance Capital, told the court “I have made mistakes, I have learned my lesson” but a fine of €14 million doesn’t actually replace the €447 million which was collected by the pair over their seven-year crime spree.
It is believed that the technical legalities surrounding the trial made it the most complicated tax fraud case in history but the convictions may be used as a precedent in future trials.