In the criminal case against Detlef M., the former managing Director of Warburg Invest, the Cologne public prosecutor’s office has demanded a prison sentence of seven years for the accused. The cum-ex transactions in which the accused had been involved had led to a tax loss of around 150 million euros in 2009 and 2010, prosecutor Axel Körtgen said on Thursday in the courtroom of the Bonn District Court.
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He focused on the enormous amount of damage to the tax authorities. In favor of M., it should be appreciated that he did not personally benefit from the actions and was not the driving force. His defence lawyer argued for a suspended sentence for his client. In the case of the serious tax evasion accused of him, the Tax Code prefers a penalty of 6 months to ten years. A verdict is expected next Wednesday.
Allegations against bank owner
The proceedings have been ongoing since September 2021, but it was only in January that the accused admitted to the allegations and made a confession. In it, he assumed responsibility and, among other things, put a heavy burden on Christian Olearius, co-owner of the private bank M.M. Warburg.
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According to the indictment of the Cologne Public Prosecutor’s Office, the “BC German Equity Special Fund” and the “BC German Hedge Fund” launched by Warburg Invest caused the tax authorities a loss of 157 million euros in 2009 and 2010. In his admission, M says: “I deeply regret that this has created an essential prerequisite for the execution of the transactions discussed here and the immense tax damage caused by it.“ At the end of 2021, M. had left the Warburg Group after 27 years in various management positions.
Privatbank M.M. is involved in various criminal proceedings itself or through former employees. After the first cum-ex judgment in spring 2020, the Federal Court of Justice confirmed the collection of 176 million euros that the bank had earned with cum-ex transactions in the summer of last year. A former chief plenipotentiary was sentenced by the Bonn District Court to five and a half years in prison for serious tax evasion. The defendant appealed against this decision.
Olaf Scholz, then still Federal Minister of Finance, after his testimony before the Cum-ex committee in Hamburg in April 2021. : Bild: dpa
The Cologne Public Prosecutor’s office has also been investigating Christian Olearius and Max Warburg, both majority owners of M.M. Warburg, for years. A search of Olearius led to the seizure of his diary. There, the banker had written about various meetings in autumn 2016 with Olaf Scholz (SPD), then the first mayor of Hamburg. Shortly thereafter, Hamburg’s tax authorities had a tax claim against Warburg-Bank of 47 million euros statute-barred.
