As a financial officer, Hanno Berger was once obliged to the state. Later he makes a business model big, with which the Treasury was cheated out of billions. Eleven years after the practice was blown, a court has ruled in the first criminal case against “Mister Cum-Ex”.
The Bonn district court has sentenced the architect of the cum-ex stock deals, Hanno Berger, to eight years in prison. The court ruled that the 72-year-old was guilty of three counts of tax evasion. The verdict is not yet legally binding. The possible maximum was 15 years, the prosecution had called for nine years in prison. The defense had admitted misconduct on the part of their client, but the extent of this was significantly less than what the public prosecutor had said. The crimes spanned the period from 2007 to 2011.
Berger is the best-known protagonist of the business model, which the Federal Court of Justice classified as a criminal offense in 2021. He advised banks, funds and investors on the construction of transactions and recruited wealthy clients through his network. He made millions for it. He used to be a civil servant in the Hessian tax administration, later he switched sides and provided the financial actors with in-depth knowledge of tax law. At the end of 2012, tax expert Berger fled to Switzerland, where he was able to evade German justice for years. It was only delivered to Germany in February 2022. Parallel to the Bonn proceedings, another criminal case is being brought against him before the Wiesbaden district court, where he is accused of further cum-ex offenses.
Berger did not invent the business model in which shares with (“cum”) and without (“ex”) were postponed around the dividend date and unpaid taxes were refunded. However, he is regarded as a pioneer for Cum-Ex being able to be operated on a large scale in Germany. The German state lost a double-digit billion euro amount as a result of Cum-Ex. “Hanno Berger was one of the central minds behind the illegal cum-ex business” and “a kind of spin doctor,” said Gerhard Schick from the citizens’ movement Finanzwende in Berlin, with a view to the Bonn court decision. “He made Cum-Ex big among wealthy individual investors.”
Schick called for more speed in the processing of the tax scandal. “We are in the eleventh year since such transactions were stopped, and despite more than 1,500 accused, the accused can be counted on a few hands,” he criticized. The cum-ex clarification went at a snail’s pace for years, “because many preferred to sweep the topic under the carpet”.
The processing of the largest tax scandal in the Federal Republic is likely to take years. In order to be able to cope with the flood of foreseeable processes, a new building is being built in Bonn’s neighboring town of Siegburg just for future cum-ex processes. The building is scheduled for completion in 2024.
