In the most important cum-ex trial to date against the key figure Hanno Berger, the public prosecutor and the defense presented their pleas on Tuesday. Prosecutors are demanding nine years in prison for Berger, who is also known as “Mr. Cum-Ex” in investigator circles. In addition, Berger should pay back more than 27 million euros to the tax authorities together with his former law firm partner.
The investigators see it as proven that Berger was guilty of three cases of particularly serious tax evasion. Not only did he understand the complicated business exactly, as numerous emails and witnesses would prove. The claim that he considered this to be legal was also a “protective claim,” prosecutor Jan Schletz said on Tuesday, who otherwise found little to mitigate Berger’s sentence. With his demand for nine years in prison, however, he fell well short of the possible maximum sentence of 15 years. Berger’s lawyer did not name a possible sentence for his client. The verdict is expected as early as next week.
With the pleadings of the public prosecutor and the defense, the fourth cum-ex trial has reached its preliminary climax, although it was not clear for a long time whether it would be able to take place. When investigators searched his office in 2012, among other things, Berger fled to Switzerland, where he lived in exile for a long time. It was only in February of this year that the Swiss authorities extradited him to Germany, where he is currently facing two trials, one in Wiesbaden and one in Bonn. In Bonn, Berger is accused of particularly serious tax evasion in three cases, it is about tax damage of more than 270 million euros, which is said to have arisen from cum-ex transactions via Warburg Bank and Warburg Invest.
Berger is considered a key figure
With such cum-ex transactions, banks and stock traders, with the help of lawyers and consultants, have had a tax refunded one or more times over the years that they had previously paid only once or not at all. What is considered the biggest German tax scandal has cost the tax authorities at least ten billion euros. Investigators are now leading more than a thousand suspects in hundreds of proceedings. In three cases that have already been completed, the Bonn Regional Court has sentenced stock traders and bank managers, some to many years in prison. Other courts have already passed judgments in Cum-Ex matters. The Federal Court of Justice had declared cum-ex transactions punishable in 2021.
Although it is the fourth Cum-Ex process before the Bonn Regional Court, Berger’s process is considered particularly important. That’s because, according to investigators, the 72-year-old is a “key figure” in the tax scandal. In the past he was called Mr. Cum-Ex, among other things, because he opened the business model, which was previously reserved for banks, to rich wealthy people who invested in Cum-Ex funds and thus achieved fantastic returns at the expense of the state.
According to Schletz, Berger not only knew about the cum-ex deals, but actually orchestrated them and earned a lot from them himself. In the three negotiated cases alone, Berger, together with his former colleague S., who is now a key witness, earned more than 27 million euros. The public prosecutor’s office now wants to let him and S. collect them. Berger’s lawyer recently stated that his client no longer had the money and could therefore not pay.
It was a long, quiet lecture that the public prosecutor’s office gave that Tuesday and Berger didn’t get off well. Schletz calmly explains that he both thought up and advised on the business. In addition, Berger brought individual banks and stockbrokers together for the business in the first place, which clearly makes him an accomplice in these cases. Overall, the tax authorities incurred tax losses of more than 270 million euros.
“High criminal energy”
In Berger’s favour, the only thing to be considered is that the process lasted relatively long, there was partial media prejudice with labels such as “master of greed” and that he made a partial confession at the end of the trial. However, Schletz did not want to judge that as such, it had come very late, was motivated purely by process tactics and was not carried out by “remorse”.
At his expense, on the other hand, a lot comes together, above all the sheer amount of the allegedly evaded sum. In addition, Berger’s behavior showed “high criminal energy”. He had “embroiled” others in tax evasion in the first place, although he was aware that Cum-Ex “was a bare grip on the state coffers”. He didn’t necessarily take from the poor, but he gave to the rich and above all to himself. Accordingly, a prison sentence of nine years is appropriate, and the arrest warrant against Berger should be upheld. So far he is in custody. There is still a risk of absconding, Schletz said. Then there was a short break.
“Objectively, the matter is relatively clear after the evidence has been taken”
Enter Berger’s lawyer. In the morning, Richard Beyer gave a lively lecture in Latin, among other things, and tried to explain with parables from Greek mythology what would speak in favor of his client and a mild sentence by the court. He deliberately did not want to commit himself to a “number”, as he himself called the possible penalty for Berger. He rather trusts the goodness of the court and that it takes into account what he presented in room 0.11 for more than half an hour. First of all, there is the objective view of things and there he has to state: Berger actually knew how Cum-Ex works, how the engine room ticks and rattles. He advised and also brought in clients who then invested in cum-ex deals. So far, the defense and prosecutors agree. “Objectively, the matter is relatively clear after the evidence has been taken,” said Beyer.
Beyer differed from the prosecutor’s office on two points: On the one hand, Berger did not take part in any cum-ex deals in 2011, so he could not be convicted. On the other hand, Berger acted without intent until 2009, which could have a mitigating effect. His reason for this: Berger simply interpreted the legal texts very precisely and also looked at other institutions and banks, including the state-owned West LB, which also processed cum-ex transactions. Since the finance ministers of the respective countries sat on their supervisory boards, one could have assumed that they would find such deals okay. That only changed in 2009, says Beyer, before he once again appeals to the court’s kindness in his last sentence.
Then, at the end of two long lectures, Presiding Judge Roland Zickler gives the floor again to the man whose guilt or innocence is at issue here, the man who is called Mr. Cum-Ex and who is now all giving a great lecture expect, about right, wrong and why everything was different. But Berger says only one sentence: “I agree with what Dr. Beyer said.”