Key Witness in Cum-Ex Tax Scandal Faces Trial for €428M Tax Evasion

November 21, 2024
Key Witness in Cum-Ex Tax Scandal Faces Trial for €428M Tax Evasion
  • Legislation was enacted in 2012 to close the legal loophole exploited by these transactions, and in 2021, the Federal Court ruled that Cum-Ex transactions constitute tax evasion.

  • Steck is accused of committing eight acts of severe tax evasion between 2007 and 2015, defrauding the German government of a total of 428 million euros.

  • Among the allegations, Steck is said to have defrauded the state of 50 million euros through illegal 'Cum-ex' stock transactions.

  • Steck, who confessed to his involvement in the scheme in 2016, has served as a key witness in several trials, providing extensive testimony that has been crucial in indicting other defendants.

  • This scandal primarily affected Germany, with total losses for the German government estimated in the tens of billions of euros.

  • The trial of Kai-Uwe Steck, a prominent lawyer and key witness in the Cum-Ex tax scandal, began on November 21, 2024, in Bonn, where he faces serious charges of tax evasion.

  • Despite his cooperation with authorities, which has led to multiple investigations and convictions, Steck has not received guarantees against prosecution.

  • The scheme exploited a tax law loophole by allowing investors to swap shares around dividend payment dates, enabling them to claim tax refunds for taxes they never paid.

  • Although Steck previously expressed a willingness to return 50 million euros he earned from the scheme, he has only repaid 11 million euros to date.

  • Steck's defense attorney has accused the Cologne public prosecutor's office of treating him unfairly and failing to uphold promises made during negotiations.

  • The Cum-Ex scandal, which peaked between 2006 and 2011, involved a complex network of financial misconduct that has drawn significant public and legal scrutiny.

  • The trial is expected to last for 24 sessions and may set precedents for numerous other ongoing investigations involving approximately 1,700 other suspects.

Summary based on 4 sources


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