“CumEx Files”: Hanno Berger, the alleged mastermind of the 140 billion euro scandal

Published on : 10/21/2021 – 6:28 PM

Three years later and almost three times the price. The bill for the “CumEx” financial scandal, first revealed in 2018, has risen considerably from 55 billion euros to 140 billion euros, according to new revelations on the extent of this affair of tax evasion published by the German investigation site Correctiv in partnership with around thirty other media around the world, Thursday, October 21.

The CumEx scandal refers to financial arrangements made for years – and potentially even today, according to Correctiv – by the super-rich around the world, with the help of bankers and lawyers to avoid paying fortunes to the tax authorities

More than 30 billion euros lost for the French tax authorities

In France, 33 billion euros have been lost by the tax authorities over the past 20 years, says the daily Le Monde, which took part in this survey. In Germany, where the CumEx affair is considered the “financial scandal of the century”, 36 billion euros in tax revenues are missing, calculated tax specialists at the University of Mannheim who participated in this survey. The scandal also affects the United States, the United Kingdom, Spain, Belgium and the Netherlands.

These new revelations put pressure on Switzerland, which has held, since July 2021, a key figure in history, awaiting extradition. Tax lawyer Hanno Berger. Better known in Germany as “Mister CumEx” or “Dr CumEx”, he is considered to be the architect of the sleight of hand that has enabled wealthy taxpayers to save hundreds of millions since the mid-2000s. euros in taxes… and even to dig into the state coffers.

The CumEx case indeed concerns two types of complex arrangements. The first – called CumCum – largely avoids dividend tax. For an owner of company shares, it is a question of “lending” his shares to an accomplice bank a few days before having to pay taxes on dividends (dividends are the annual remuneration of the shares). Thus, when the tax authorities knock on the taxpayer’s door, the latter can say that he has nothing to pay. The bank, for its part, can argue that it is only a simple intermediary. At the end of the day, all these little people claim to owe nothing to the tax authorities, who find themselves deprived of precious resources.

Exile in the Swiss Alps

This is by far the most common practice in this story, but in Germany CumEx – the other montage – has hit the headlines the most. And Hanno Berger became its living embodiment. It is no longer just a question of avoiding the tax on dividends, but of obtaining, in addition, the reimbursement of part of this tax, however never paid, by exploiting loopholes in the tax system!

German justice began to take an interest in Hanno Berger long before the first revelations of 2018. On November 27, 2012, this tax specialist urgently decides to move to Zuov, a typical village of 1,200 inhabitants of the Swiss Alps. On the same day, the German authorities organized a raid on the consulting firm that this lawyer had created to help these wealthy clients save millions on the backs of German taxpayers.

It has therefore been almost a decade that Hanno Berger, now 70 years old, taunted justice from the other side of the Alps, where he has long been sheltered. Switzerland often drags its feet to extradite taxpayers who have trouble with the tax administration of their country.

But even the Helvetians had to admit that the charges against Hanno Berger were too heavy and that the Swiss authorities had everything to lose in protecting him. The latter is accused, in the international arrest warrant drawn up against him in January 2021, of being the unique “Spiritus Rector”, that is to say the mastermind of an operation which, between 2007 and 2011, cost 391,893,343 euros and 90 cents.

He is not only accused of fraud. Hanno Berger is also suspected of having tampered with the accounts of certain clients, and of having deceived others by using their money for financial arrangements of which he was the main beneficiary. In all, he would have won, alone, around 27 million euros playing the big game of CumEx.

Imaginary illness ?

He also allegedly tried to pay bribes to several German politicians in the early 2010s to avoid passing a law that would make fraud even more complex.

The German authorities even accuse him of having exchanged part of his earnings in gold bars and then of having them pass discreetly, by truck, to Switzerland, shortly before settling in Zuov. “For the investigators, this is a sign that he had made arrangements to have funds that could be quickly mobilized if he needed to flee further,” explains the German daily newspaper Süddeutsche Zeitung.

Hanno Berger has always denied the existence of this gold. The septuagenarian also disputes all the accusations against him. Since 2018, he has rehearsed at multiple appearances in the German media that the whole procedure was windy, that it was rubbish and that as a “lawyer” he was eager to explain himself in court.

But at the beginning of 2020, when he was summoned by justice, he suddenly fell very ill, assured his defense, a doctor’s attestation in support. Given the condition of their client, his lawyers asked the German authorities to “close” the case.

In response, the German justice offered to send another doctor for a second opinion. But Hanno Berger never followed through, recalls the daily Handelsblatt.

Hanno Berger also argued that due to his illness he should be released pending his extradition to Germany. His life would even be in danger if he remained behind bars, his lawyers assured. But Swiss justice did not want to hear anything. The hospital did not even consider it necessary to take him in.