In the end he comes. Hanno Berger steps onto the blue, faded carpet in Room 0.11 in the Bonn District Court, and the handcuffs on his wrists flash briefly. The photographers’ SLR cameras click, television cameras illuminate the dock. Nine and a half years after he fled to Switzerland, he is on trial in Germany for the first time: Berger, 71, lawyer and tax consultant, mastermind, key figure, “Mr. Cum-Ex”. No one else stands with his name for the affair about stock transactions at the expense of the tax fund.
His dark suit sits loosely on his high shoulders, and his long, dark blue tie dangles from his neck. His hair has turned light and gray, but he has retained his expansive presence. He appears combative when he’s taking notes during the trial, talking to his lawyers, or looking across the room. There sits the Cologne chief public prosecutor Anne Brorhilker. The woman who took him where Berger probably never wanted to go: to prison, where he will most likely be held in custody pending a possible conviction.
It is the fourth cum-ex process at the Bonn Regional Court, one of many that will follow – and yet one of the most important processes in this scandal. Dozens of journalists, representatives from law firms and interested private individuals have gathered in the large hall of the district court to experience the “king of the tax consultancy industry”. That’s what a former companion once called him. The public prosecutor accuses him of serious tax evasion in three cases, tax damage of more than 270 million euros. The prosecution lists more than 30 witnesses and almost 400 pieces of evidence.
Berger only seemed safe in Switzerland
In 2012, when the Frankfurt Public Prosecutor’s Office searched his office at the time because of the stock transactions in question, Hanno Berger fled to Switzerland, where he lived in exile from then on. This was considered safe because Switzerland usually does not extradite in criminal tax matters. But things were different with Berger, the Swiss judiciary arrested him at the request of the German authorities and handed him over to the German authorities at the end of February.
A few weeks later, Anne Brorhilker presented what she accused Berger of after years of investigation. There are some facts that have already been confirmed by the highest court. By 2007 at the latest, Berger had teamed up with the private bank Warburg, some bankers from Hypo-Vereinsbank and their later specially founded hedge funds to conduct cum-ex transactions with German stocks. “The only incentive for carrying out such transactions,” Brorhilker reads, “was to achieve an illegal credit or refund of capital gains tax and solidarity surcharge, which had previously neither been withheld nor paid.” A few clever men cash in because the Treasury pays out tax money that it never collected. Berger’s version is that it is state failure, but by no means criminal.
Berger has lost little of his authoritarian charisma, even if he says little on the first day of the trial. And although the imprisonment is eating away at him: his lawyers describe his stay in prison as “ordeal” and emphasize that his health is in poor condition. As soon as the presiding judge, Roland Zickler, speaks the first words, Berger grabs a pen and fills the papers in front of him page by page. As if he were sorting his thoughts in order to begin the counter-speech straight away.
The defendant has a whole box of documents with him
Even before the main hearing really begins, one of the defense attorneys calls. Berger brought a box of documents that he would like to have on hand. “What is the volume?” asks the presiding judge, Roland Zickler. Berger says: “There are nine files.” Zickler orders the box to be fetched. After a while, a law enforcement officer pushes a sack truck through the door, with a kind of moving box on it. His process, which fills thousands of sheets, condenses into these few folders. Berger gets up, tears off the tape, opens the box and grabs the indictment.
There are dozens of pages and columns of numbers of claims that Brorhilker will read out over the next few hours. It is about the method with which Berger is said to have exempted the German tax authorities, his lobbying for Cum-Ex and how he networked the key figures. He is said to have collected almost 28 million euros in accounts from letterbox companies and thus himself to have benefited massively from the alleged tax evasion.
He was not guilty of anything, says Berger
The trick was to trade large blocks of shares worth several hundred million euros back and forth on the day of the profit distribution. Capital gains tax due on the dividend can be refunded or credited to certain market participants. This is the only reason why there was a return at all: the participants claimed taxes that nobody had previously paid and shared the proceeds. The Federal Court of Justice condemned this as criminal in the summer of 2021, and the Federal Fiscal Court in early 2022 as not permissible under tax law.
The pattern known in earlier years as “dividend stripping” was nothing new in 2006 and 2007. But it was only during this time that it acquired the industrial character that today results in around 1,500 suspects in more than 100 criminal proceedings. According to the prosecution, one of the top managers in this industry was Hanno Berger. He brought together hedge fund managers, private bank Warburg, wealthy investors and tax lawyers to spin the big wheel.
Berger had always denied – and still does today – that cum-ex deals were punishable by law. He himself was not guilty of anything. Rather, he sees himself as a victim of justice, unjustly persecuted. He never tired of emphasizing this, even if the number of his supporters continued to decrease: A few weeks before the start of the trial, his previous elected defense attorneys also gave up, who have since been replaced by two new defense attorneys.
Mr. Berger’s big sweep. When Zickler asks if he has anything to say, one of his defense attorneys replies: they have consulted. Mr. Berger will initially not comment on the matter.