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.