Ex-lawyer told to expect conviction in major tax scandal

A former Freshfields Bruckhaus Deringer lawyer who advised top investment banks on how to navigate the "Cum-Ex" trading strategy at the center of Europe's biggest tax scandal was told to expect a conviction for his actions. 

Ulf Johannemann, former global head of tax at the firm, is likely to be found guilty over the advice he gave to now-defunct lender Maple Bank GmbH for transactions that allegedly cost Germany €374 million ($407 million), Presiding Judge Werner Gröschel said at a hearing in Frankfurt on Monday. Judges reviewing the evidence are leaning toward a conclusion that Johannemann crossed the line between providing legal advice and aiding a crime, he said. 

"The accused knew that refunds were claimed on tax that had never been paid," said Gröschel. "And he knew that Maple didn't disclose that to the tax authorities."  

Michael Nagle/Bloomberg

For the London ranks of global investment banks, Freshfields was the go-to for advice on Cum-Ex — a ploy that gamed the system to pass vast sums from Germany's treasury into the hands of scores of investors and banks. The list of clients ranged from JPMorgan, Merrill Lynch, Barclays Plc, Lehman Brothers and Fortis to Macquarie Group Ltd. and ICAP Plc. Without clearance from a top-notch law firm, none of them would have done the controversial trades.

A former Maple banker tried alongside Johannemann must also expect to be convicted, said Gröschel.