prison sentence against top lawyer at Freshfields Bruckhaus Deringer

Germany

The next verdict has been reached in the multi-billion euro tax scandal surrounding cum-ex share transactions. On Tuesday, Frankfurt am Main Regional Court (Landgericht) handed down a prison sentence of three years and six months against a former top lawyer at the major law firm Freshfields Bruckhaus Deringer.

The court considered it proven that the man had aided and abetted serious tax evasion in four cases. (Judgment of 30.01.2024 - 5/24 KLs 7480 Js 208433/21 (2/21)). This is the first time that a tax lawyer from a major law firm has been prosecuted for his role as an advisor in the cum-ex complex. In addition to the former Freshfields top lawyer, a former Maple banker was also convicted. He received a two-year suspended prison sentence for tax evasion after he had already confessed at the start of the trial.

The former lawyer had advised Maple Bank on cum-ex deals. Freshfields prepared expert opinions on the tax permissibility of the share deals. The Frankfurt Public Prosecutor General's Office had accused the tax lawyer of having facilitated the deception of the tax authorities by providing "courtesy opinions". According to the indictment, Maple Bank caused a tax loss of around 388 million euros with cum-ex transactions - until it plunged into bankruptcy itself in 2016 because it was threatened with over-indebtedness due to a tax provision for cum-ex transactions.

In cum-ex deals, which had their heyday between 2006 and 2011, investors had unpaid capital gains tax refunded and defrauded the state of at least an estimated ten billion euros. In doing so, they exploited a loophole in the law. The loophole was only closed in 2012. In 2021, the Federal Court of Justice ruled that cum-ex transactions should be regarded as tax evasion.

on Regional Court Frankfurt a. M., judgment of 30.01.2024

Editorial beck-aktuell, ak, 30 Jan 2024 (dpa).