Mastermind of German tax scam gets eight years in prison

Hanno Berger, a German lawyer dubbed the “mastermind” of Cum-Ex, was sentenced to eight years in prison for his role in part of a sprawling tax scandal that’s robbed billions of euros from government coffers and embroiled some of Wall Street’s biggest names.   

Berger was found guilty of three counts of aggravated tax evasion, the Bonn Regional Court said on Tuesday. As well as a jail sentence, judges also seized €13.7m (R252m) from Berger, who had been charged with involvement in transactions that cost his country €278m (R5.1bn).

Once Germany’s most profitable tax attorney, Berger fled in 2012 when his Frankfurt law firm was raided. After more than nine years in Switzerland, he was extradited in February. He’s also standing trial in another German court case. If he’s also convicted there, the term is likely to be increased.

Cum-Ex took advantage of laws that seemed to allow duplicate refunds on dividend taxes that siphoned off huge amounts of government revenue over several years. Germany is looking at more than 1,600 suspects from across the financial industry and banks from Morgan Stanley to JPMorgan.

Berger was a key player, advising rich investors on how to use the strategy that until about 2005 had been limited to the trading between banks. His actions were widely discussed at the first German Cum-Ex trial in Bonn that led to convictions of two former investment bankers. One of his former associates is co-operating with prosecutors and told the court about Berger’s role in the deals.

His defence lawyer Richard Beyer didn’t immediately reply to an email seeking comment. 

More stories like this are available on bloomberg.com