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Former Freshfields Tax Head Ulf Johannemann Sentenced in Cum-Ex Fraud: Examining Legal and Ethical Implications

Ulf Johannemann, the former global head of tax at Freshfields Bruckhaus Deringer, has received a sentence of three years and six months in prison from the Frankfurt District Court for his role in a cum-ex fraud scheme. The judgment, delivered on January 30, comes after Johannemann was found guilty of aiding and abetting a complex dividend tax fraud that spanned multiple years. Prosecutors had initially sought a more extended prison term of five-and-a-half years, while Johannemann's defense had argued for a more lenient suspended jail term of fewer than two years.

Former Freshfields Tax Head Ulf Johannemann Sentenced in Cum-Ex Fraud: Examining Legal and Ethical Implications

The case centers around Johannemann's advisory role to Maple Bank, a defunct German subsidiary of Canada’s Maple Financial, during the period from 2006 to 2009. Maple Bank orchestrated share-swapping deals that manipulated German tax authorities, resulting in the refund of over €388 million ($424.7 million) in dividend taxes that were never originally paid.

Johannemann, who held the position of Freshfields' most senior tax partner until 2019, admitted in court in December to a significant failure in his capacity as a legal adviser, taking full responsibility for his mistakes. He acknowledged the possibility that he may not have been fully informed about Maple Bank's cum-ex transactions from 2006 and conceded that he consciously chose not to delve into the full details.


Maple Bank, closed by Germany’s financial watchdog BaFin in 2016, heavily relied on legal opinions issued by Johannemann. These opinions asserted the legality of so-called 'cum-ex' transactions under Germany’s tax law, playing a crucial role in the bank's decision to engage in these trades. While Freshfields managed to avoid direct prosecution over its advice to Maple Bank through a 2021 deal involving a voluntary payment of €10 million to the German tax authority, Johannemann's sentencing underscores the legal repercussions for individuals involved in cum-ex fraud schemes.

The broader context of the cum-ex and cum-cum dividend tax scandals, causing an estimated €150 billion in tax losses for EU governments between 2000 and 2020, highlights the pervasive impact of such financial misconduct. This case serves as a cautionary tale regarding the ethical and legal responsibilities of professionals in financial and legal advisory roles, emphasizing the potential legal consequences when individuals are implicated in fraudulent activities of this nature.



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