An ex-banker from the former bank-insurer Fortis has been sentenced to three years and three months in prison for his role in the so-called CumEx scandal. A five-judge court in Frankfurt, Germany, found the man guilty on Monday, after a two-month trial.
The German Frank H. transferred 51.5 million euros through illegal transactions. ABN Amro, which had taken over the part of Fortis that carried out the transactions, paid back the money to the tax authorities.
In CumEx fraud, which refers to the Latin words ‘cum’ (with) and ‘ex’ (without), several investors requested a refund of dividend tax from the tax authorities, even though it had never been paid or had only been paid once. Shares were sold around the time the dividend was paid, after which both seller and buyer demanded the tax back.
Several European and American banks engaged in the practices. When Germany explicitly banned CumEx trading in 2012, it would have already cost the country around 10 billion euros.
At the end of last year, the German inventor of the dividend fraud system was sentenced to eight years in prison. Hanno Berger was found guilty of tax evasion between 2007 and 2011. The man was once a tax inspector, but then became a tax lawyer and advisor.
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