German Prosecutor Unveils Charges Against Freshfields' Former Tax Head
The investigation stems around advice given to Maple Bank's collapsed German arm over so called 'cum-ex' transactions.
January 20, 2020 at 06:21 AM
3 minute read
Former Freshfields Bruckhaus Deringer head of tax Ulf Johanneman and six former bankers of the now collapsed Maple Bank have had charges filed against them in relation to their alleged involvement in the 'cum-ex' tax scandal.
The Public Prosecutor General's Office in Frankfurt published a statement on Monday (Jan 20) outlining the charges, which were brought in December 2019. The German statement presents the prosecutor's charges of "serious tax evasion" and "at the same time, the involvement of a law firm because of the decision to impose a fine".
Charges are brought against the tax lawyer, which one person said was Johanneman, for developing and advising on the transactions while "knowing the actual structure of the cum-ex transactions and deliberately issuing a maturity report in order to make the business seem supposedly legal".
Johanneman's lawyer did not immediately respond to a request for comment.
Further charges have also been brought against the former charman of a credit institution, believed to be Maple Bank, and five more of its bankers who are said to "have benefitted from performance-based bonus payments from their employer", which amounted to "a total of €29,478,148.08".
The statement continues: "The tax damage caused according to the indictment amounts to a total €388,557,251.30. So far, just over €75 million euros have been due to the tax authorities as part of an external tax audit repaid".
The scandal has clouded German commerce for several years and is rooted in the so-called cum-ex transactions, which were allegedly used by a number of banks to claim multiple tax refunds that had only been paid to the German authorities once, before a loophole allowing such practices was closed in 2012.
A Freshfields spokesperson declined to comment on the charges brought due to the ongoing legal proceedings.
Frankfurt-based Johannemann left Freshfields in November and was arrested a week later. He was in custody until just before Christmas when he was released on €4 million bail, according to one person with knowledge of the situation and various press reports.
Elsewhere in the saga, DLA Piper Germany's co-managing partner Konrad Rohde stepped down from his role in December in a move said to be related to the ongoing tax scandal.
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