BERLIN (AP) – Germany’s highest court on Wednesday dismissed an appeal by two British bankers because of their conviction in a case of massive tax evasion and confirmed that the so-called cum-ex transactions they used were illegal.
The Federal Court of Justice also confirmed that the seizure of 14 million euros (16.5 million US dollars) from one of the defendants and around 176 million euros (207 million US dollars) from the Hamburg-based private bank MM Warburg was justified.
The ruling sets an important precedent for future trials in the “Cum-Ex” scandal with hundreds of suspects.
The two British bankers were convicted of multiple tax evasion between 2007 and 2011 last year. They were given suspended sentences after agreeing to provide detailed information about the scam program, in which participants exchanged shares to get refunds of taxes they hadn’t paid.
The defendants had claimed during their trial that they had only exploited a loophole in the law. However, federal judges concluded that the program was illegal and there was “no doubt that the acts were deliberate,” the court said in a statement.
MM Warburg said the ruling had “no economic consequences” for the bank.
The ruling is likely to have an impact on further proceedings. Allegedly hundreds of bankers were involved in the system and are said to have defrauded taxpayers of billions of euros.