German court convicts top ex-bankers in tax fraud case

By Oliver Towfigh Nia

BERLIN (AA) - A regional court in Germany imposed prison sentences on three former bankers over their role in a tax fraud scandal, local media reported on Tuesday.

The judge of the Frankfurt Regional Court issued the verdict against the former management team of Maple Bank, once a branch of a Canadian banking group in the city and deeply involved in the biggest tax scandal in the history of post-World War II Germany, according to the business daily Handelsblatt.

Wolfgang Schuck, the long-time managing director of the bank, which has been insolvent since 2015, was sentenced to four years and four months for tax evasion. The court shortened his prison term due to his poor health and the long duration of the proceedings, along with other factors.

Schuck will also have to pay a fine of €96,000 ($95,930), while another €2.9 million are to be confiscated from his assets.

Another former CEO was handed a prison sentence of four years and two months in prison, a fine, and will have more than €1 million confiscated.

The third defendant, who once worked at the bank's trading desk and was jointly responsible for cum-ex transactions at the heart of the scandal, was sentenced to three and a half years in prison for aiding and abetting tax evasion.

All three have the option of appealing the verdict, which is not final.

Dozens of people have been indicted over the so-called "cum-ex" scandal in Germany, among them bankers, stock traders, lawyers, and financial consultants, with investigations ongoing in over 400 linked cases.

The scandal was the result of traders using a legal loophole to trick governments and receive millions in repayments for taxes they never paid. This involved banks, lawyers, and stockbrokers trading shares with ("cum") and without ("ex") dividend rights.