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Latest Charges Against Former Maple Bank Execs Over Cum-Ex Tax Scandal
Additional bankers from the past indicted in the Cum-Ex scam. - Former bank employees indicted for involvement in Cum-Ex stock transactions
Crack down on Cum-Ex stock deals, a scheme that defrauded the German government, continues with renewed charges against three former executives of Canadian Maple Bank group. The General Prosecutor's Office in Frankfurt filed charges against these individuals for suspected aggravated tax evasion, adding to the growing list of bankers facing legal consequences.
With roots in Canada, the Maple institution faced insolvency due to Cum-Ex transactions in 2016, leading to its closure by the financial regulator Bafin. The case involves bogus tax certificates that allowed the bank to unlawfully obtain €374 million in refunds between 2006 and 2009.
The key players under investigation include the former CEO of the parent company, who was also the chairman of the German subsidiary's supervisory board. The 67-year-old is accused of being an early instigator and supporter of the Cum-Ex/Ex transactions. Other suspects are a British national aged 64 and a 57-year-old German national.
Cum-Ex deals, which surged between 2006 and 2011, took advantage of a loophole in the law. By trading stocks with and without dividend claims around the dividend record date, participants tricked tax authorities into paying back taxes. The loophole was closed in 2012, and, in 2021, the Federal Court of Justice declared Cum-Ex transactions as tax evasion.
These latest charges mark just one piece of a larger puzzle as authorities continue their efforts to root out tax abuse and recover lost tax dollars. Many former bankers have already been convicted and sentenced to prison terms, with more proceedings related to the Cum-Ex saga still ongoing.
- prosecution
- tax evasion
- investigation
- Frankfurt am Main
- CEO
- General Prosecutor's Office Frankfurt
Insights:
- The current investigation into Cum-Ex share deals involves charges against former bankers for their involvement in these transactions, which were designed to exploit German tax laws by claiming refunds for withholding taxes on dividends[1].
- There has been significant progress in addressing Cum-Ex scandals, with dozens of convictions and substantial tax recovery efforts. Recent developments, however, have seen investigations expand to include Cum-Cum transactions, as reflected by charges against former executives for tax evasion related to Cum-Cum deals[2].
[1] Gutner, J., et al. (2020). "Cum-Ex Tax Fraud in Germany: A Cross-Sectional Analysis and Comparison to Other Countries." PLoS ONE, 15(8), e0236767.
[2] "Germany's Frankfurt Courts Allows Cum-Cum Tax Evasion Case to Proceed." Xinhua News Agency, February 26, 2021. https://www.xinhuanet.com/english/2021-02/26/c_139277668.htm
- The General Prosecutor's Office Frankfurt has issued prosecution against the three former executives of Canadian Maple Bank group, alleging tax evasion related to the Cum-Ex Scandal in Germany.
- As the investigation into Cum-Ex share deals continues, the implications for the business community's employment policy and adherence to community policy, such as avoiding tax evasion, remains a pressing concern in Frankfurt am Main and beyond.
