On Tuesday, the Frankfurt regional court imposed a prison sentence of three years and six months on a former prominent lawyer at the leading law firm Freshfields Bruckhaus Deringer for complicity in serious tax evasion in four cases. This was the first time that a tax lawyer from a major law firm was prosecuted for his role as an advisor in the Cum-Ex complex.

In addition to Freshfields' former lead attorney, a former Maple banker was also convicted. He received a two-year suspended sentence for tax evasion. He had already made a confession at the beginning of the trial.

Prosecutor's Office: the “convenience report” allowed the tax authorities to be deceived

The former top lawyer had advised Maple Bank on cum-ex deals where it was long unclear whether they were illegal. Freshfields prepared reports on the tax admissibility of share transactions. The Frankfurt Public Prosecutor's Office accused the tax lawyer of having allowed the tax authorities to be deceived with “courtesy reports.”

According to the indictment, Maple Bank caused tax damage of around €388 million with cum-ex transactions, until it went bankrupt in 2016 due to the threat of over-indebtedness due to a tax provision for cum-ex transactions.

Maple Bank caused tax losses of 388 million euros with cum-ex transactions

In the cum-ex deals, which peaked between 2006 and 2011, investors were refunded taxes on capital gains they never paid and are estimated to have defrauded the state of at least ten billion euros. They took advantage of a legal loophole. The loophole was not closed until 2012. In 2021, the Federal Court of Justice decided that cum-ex transactions should be considered tax evasion.

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