The multiple tax refund known as cum-ex deals is a criminal offense according to the district court in Bonn. This was decided by the court at the end of the nationwide first criminal trial regarding the controversial business. The defendants received suspended sentences.
The court sentenced the stockbroker Martin S. to ten years’ imprisonment for tax evasion, which are suspended for probation. The court also ordered the withdrawal of 14 million euros from his assets. The second defendant, Nicholas D., is given five years of suspended probation for aiding and abetting tax evasion. The M.M.Warburg group, which is also involved in the process, has to pay around 176 million euros in tax debts due to the cum-ex transactions.
In the case of Martin S., the court complied with the prosecutor’s request. The prosecutor’s office had ordered Nicholas D. to serve ten months in prison. The indictment referred to the extensive cooperation between the two dealers and the investigators.
The defenders of the two stock traders also advocated mild penalties. A lawyer from the M.M.Warburg Group had requested that the court should refrain from confiscating profits from cum-ex transactions, partly because of the limitation period.
According to the indictment, the two dealers are said to have tricked stock dividends from 2006 to 2011 and brought the German state around 440 million euros. The court had shortened the coronavirus outbreak.
The defendants had testified to the public prosecutor and to the court. The court had already announced in an interim report in September that tax evasion was fundamentally fulfilled in a particularly serious case.
In the case of the Cum Ex transactions, investors received multiple repayments of a capital gains tax paid on equity dividends with the help of banks. To this end, they shifted shares with one another – that is cum – and without – ex – entitlement to dividends around the key date of the dividend payment.
The cases had spread widely, causing billions in damage to taxpayers. That is why there are repeated searches at banks and law firms. The Wiesbaden Regional Court is also examining whether it allows charges against several accused, including the lawyer Hanno Berger.