Six men charged alongside hedge-fund founder Sanjay Shah settled their German money-laundering cases over the proceeds of Cum-Ex tax deals in Denmark and Belgium.
(Bloomberg) — Six men charged alongside hedge-fund founder Sanjay Shah settled their German money-laundering cases over the proceeds of Cum-Ex tax deals in Denmark and Belgium.
The defendants agreed to pay between €30,000 ($32,000) and €100,000 to end the cases against them, a spokeswoman for the Hamburg court said on Friday. Proceedings against three others accused will continue, she added. Among them is Shah, according to people familiar with the case.
The settlements are linked to a 9 billion kroner ($1.3 billion) Danish tax fraud probe in which Shah, founder of Solo Capital Partners LLP, was also charged. His trial in that country was scheduled to begin earlier this month but was postponed until January after authorities in the United Arab Emirates failed to extradite him on time. Shah is accused of masterminding the Danish Cum-Ex schemes.
In the Hamburg probe, Shah was charged with 55 counts of money-laundering for channeling funds obtained by Cum-Ex deals in Denmark and Belgium via German accounts. He was also charged with tax evasion for allegedly using the tax-exempt status of a New York-based Jewish school to claim illicit refunds in Germany.
The Hamburg court allowed the case against Shah and the two other accused remaining under prosecution to go to trial, according to the spokeswoman. Two of the six people who settled still haven’t paid their bill, she added.
Cum-Ex was a controversial tax-driven trading strategy in use for more than a decade. The tactic, which originated with traders in London who took Germany as well as Denmark as prime targets, exploited the way dividend tax was collected so that multiple investors could claim refunds on a tax that was only paid once.
Read More: A Hedge Fund, a Jewish School and $1.1 Billion in Cum-Ex Trades
Lawyers for seven of the men didn’t immediately reply to emails and calls seeking comment. A U.K.-based spokesman for Shah said he hasn’t been briefed on the details of the Hamburg case.
Danish prosecutors have alleged that Shah oversaw the Cum-Ex trading scam involving a global network of bankers, lawyers and agents who earned vast sums of money from the nation’s tax authority by using a loophole on dividend payouts to reap duplicate tax refunds. Shah, who was arrested in June 2022, has consistently maintained his innocence.
(Updates with Shah case allowed to go to trial in fifth paragraph.)
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