UK Investor Ordered to Repay EUR11 Million in Cum-Ex Scandal

A British financier involved in the notorious Cum-Ex tax fraud has been instructed to repay EUR11 million to the German government. This decision follows a ruling by the Cologne Higher Regional Court, which concluded the repayment was necessary despite previous discussions regarding financial offsets from related parties.

The individual, previously sentenced to 22 months probation in 2020 for his role in the fraudulent scheme, had made a payment of EUR3 million but contested the remaining amount. The court's recent ruling clarified that payments made by the Warburg Bank, which was also implicated in the transactions, do not reduce the obligations of the convicted party.

In light of the ruling, the defendant has expressed a willingness to settle the outstanding amount through installment payments. A spokesperson for the Bonn public prosecutor's office confirmed that the individual is prepared to comply with the enforcement of the court's decision.

The Cum-Ex scandal, described as Germany's largest tax fraud case, involved financial players manipulating shares with and without dividend rights, resulting in tax refunds for taxes that were never paid. Estimates suggest that the German state lost upwards of EUR30 billion due to these illicit activities, which peaked between 2006 and 2011.

This case is part of a broader investigation into the Cum-Ex scheme, with over 130 cases currently active against approximately 1,700 defendants, according to the Cologne public prosecutor's office, which has played a pivotal role in the inquiries.

The British financier had cooperated with authorities by providing insider information, a move that distinguished him from other accused individuals in the scandal. In contrast, Hanno Berger, a tax attorney implicated in similar activities, was sentenced to eight years in prison in 2023 for his substantial role in orchestrating the fraud.

As investigations continue, the implications of the Cum-Ex scandal serve as a stark reminder of the vulnerabilities within tax systems and the ongoing need for regulatory scrutiny to prevent future financial misconduct.