Dividend fraud: hundreds of pending proceedings in Germany

Posted on Dec. 2021 at 17:13Updated Dec 2, 2019 2021 at 18:47

The robbery of the German tax authorities by fraud on dividends continues to reveal its ramifications. The German Treasury would have lost nearly 36 billion euros following manipulation of shares with and without (Cum-ex) right to dividends between 2006 and 2013, according to the latest assessments of a media collective, including the channel German ARD and the Correctiv research center.

This pharaonic amount continues to be reassessed and does not yet include the tax losses linked to the “CumCum”, this financial arrangement now in the sights of Bercy and involving foreign banks. The German financial supervisor, BaFin, has so far evaluated the “CumCum” fraud at 610 million euros, but could revise this amount upwards.

It launched in November, with the help of the Bundesbank, a new investigation to determine more precisely “the circle of the establishments concerned and the amount of the financial charges”, she indicated. For the time being, 85 institutions have recognized their participation in the arrangements and 135 million euros have already been recovered by the German tax authorities. About a hundred cases are under examination but no indictment has yet been pronounced.

Dozens of defendants behind bars

However, the proceedings could drag on forever. In the seven-year “Cum-ex” cases, the tax authorities have already demanded repayments from a handful of banks: 167 million to MM Warburg (which the bank paid), 100 million to DZ Bank, 22.9 million to the regional bank of Hesse, Helaba, 460 million to Caceis, the subsidiary of Crédit Agricole, which obtained to pay only 312 million while awaiting the outcome of the ongoing appeal procedures …

Dozens of defendants are also behind bars while awaiting trial in Cologne, Frankfurt, Munich, Düsseldorf or Wiesbaden. Criminal convictions have already been handed down in Cologne against traders from Maple and MMWarburg banks.

Another case concerning the Bavarian management company Avana could be concluded soon in Munich, reports the daily “Handelsblatt”, citing legal sources. It would have implications for Caceis, who had acted as custodian bank for Avana.

The progress of investigations is however difficult for the handful of investigators in charge of these cases. The Cologne prosecutor’s office has 55 where there should be hundreds, according to the NGO “Finanzwende”.

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