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Prominent German Banker on Trial for Alleged Involvement in Massive Tax Fraud Scheme

In a high-profile trial that began on Monday in Bonn, an 81-year-old former CEO and chair of the Hamburg-based bank M.M. Warburg, Christian Olearius, stands accused of playing a role in a vast German tax fraud scheme known as "cum-ex" or dividend stripping. This scheme, which operated between 2005 and 2012, involved swift trading of company shares around dividend payout days, creating confusion around stock ownership and allowing multiple parties to fraudulently claim tax rebates on dividends.

Prominent German Banker on Trial for Alleged Involvement in Massive Tax Fraud Scheme

While the loophole that facilitated this fraudulent trading has since been closed, the investigation into the scheme's participants has grown substantially. Courts and officials are working diligently to hold those responsible accountable and recover an estimated 10 billion euros ($10.66 billion) lost from government coffers.


Olearius is the highest-ranking banker to stand trial in connection with this tax fraud scheme. He has firmly denied any wrongdoing but chose not to make a statement during the trial's opening day. According to prosecutor Stephanie Kerkering, Olearius is alleged to have conspired with individuals both inside and outside of Warburg to execute these fraudulent transactions.



Kerkering emphasized that the profits generated from these activities were "based on the fraudulent obtaining of taxpayers’ money." The prosecution is seeking damages of nearly 280 million euros.


M.M. Warburg, the bank connected to Olearius, declined to comment on the ongoing trial.


This year, a tax lawyer believed to be the mastermind behind the fraud was sentenced to eight years in prison, marking the longest sentence handed down in this case thus far. Several others, including a former employee of the Warburg group and two British bankers, have also received sentences and fines in connection with the scheme.


Beyond the legal implications, the case has taken on political dimensions. German Chancellor Olaf Scholz, formerly the mayor of Hamburg, has faced inquiries from lawmakers regarding whether he intervened on Warburg's behalf in the tax matter. However, Scholz has dismissed any such suggestions. The trial of Christian Olearius is expected to continue as authorities seek to bring those involved in the cum-ex scheme to justice and recover lost funds.

By fLEXI tEAM



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