Cum-Ex scandal part III: Three-and-a-half-year prison sentence for Ulf Johannemann

In the multi-million euro tax scandal complex surrounding the cum-ex share transactions, the criminal judges at Frankfurt Regional Court handed down the next judgement against one of the players on 30 January 2024.

This is the first time that the criminal liability of a tax lawyer from a major law firm in connection with his tax advice has been discussed in a cum-ex trial.

Ulf Johannemann, tax lawyer and former partner at the major law firm Freshfields Bruckhaus Deringer, has now been sentenced to three years and six months imprisonment for aiding and abetting serious tax evasion (Sections 370 (1), 3 AO, 26 StGB) in four cases.

The former top lawyer is said to have advised Maple Bank on the cum-ex transactions and, in the course of this, prepared expert opinions on the tax permissibility of the share transactions, although it was already unclear at this point whether this type of share transaction was to be considered legal.

According to the public prosecutor’s office, Ulf Johannemann “deliberately provided expert opinions as a favour […] in order to give the transactions a supposedly legal appearance.”

In 2009, he is also alleged to have attempted to misrepresent the cum-ex deals to the tax authorities in order to prevent government repayment claims.

Maple Bank subsequently carried out numerous cum-ex transactions and relied heavily on Johannemann’s “favours”. According to the public prosecutor’s office, this caused tax losses totalling around 388 million euros.

In 2016, the bank was threatened with over-indebtedness due to a tax provision for cum-ex transactions, which is why it was closed by the financial supervisory authority.

After the cum-ex transactions were classified as criminal tax evasion by the Federal Court of Justice in 2021, the Frankfurt Public Prosecutor General’s Office brought charges against Johannemann and demanded a five-year and six-month prison sentence for the tax lawyer in its plea. The defence had argued for a suspended sentence.

The court assessed the lawyer’s advisory services, who only confessed shortly before the end of the trial, as “central contributions to the offence” and spoke of a “high level of criminal energy”.

A Maple banker who was also charged had already confessed at the beginning of the trial. The court sentenced him to two years’ imprisonment, the execution of which was suspended.

The verdict is not yet final; it remains to be seen whether Johannemann and his defence will appeal.