A nationwide series of raids in Germany was conducted on suspicion of serious tax evasion through Cum-Ex deals against accused persons in three separate preliminary proceedings, the Attorney General’s Office in Frankfurt announced last night.
The suspects, aged between 46 and 55, are or were either managing directors or employees of banks in Germany. The public prosecutors did not disclose which companies were under investigation.
On Tuesday, a nationwide operation was conducted to search 19 apartments and offices in the federal states of Hesse, Lower Saxony, Baden-Wuerttemberg and Bavaria.
According to the Frankfurt authorities, the total tax loss in the three preliminary cases amounted to about 51 million euros (57.5 million U.S. dollars).
In one case, the primary defendant is said to have conducted Cum-Ex business as a managing director between 2007 and 2011 which caused almost 43 million euros in damages.
In a further proceeding, two managing directors of a Frankfurt-based company are accused of operating Cum-Ex business between 2007 and 2010 that caused financial losses of more than two million euros.
In the third case, a former and a current managing director of a company are said to have conducted Cum-Ex business leading to 5.5 million euros’ worth of damages.
In the current investigations, 52 persons are accused of conducting illegal Cum-Ex deals causing the German state more than 800 million euros in financial losses, according to the public prosecutors.
The background to the raids on Tuesday are controversial share transactions known as Cum-Ex in which investors used a gap in the law to cheat the German state for billions of euros in taxes over the course of several years.
Investors only paid capital gains tax once but were able to obtain at least two refunds of the tax from the German authorities with the help of their bank.
According to the Federal Ministry of Finance, the German government lost more than 5 billion euros through the Cum-Ex transactions before the legal gap was closed in 2012.