General Prosecutor's Office of Frankfurt files first indictment in "Cum Ex" fraud case against a lawyer and five bankers
According to recent information from the Federal Ministry of Finance, tax evaders are said to have cheated the state of more than €5 billion.Controversial "cum ex deals" are to be dealt with for the first time in criminal proceedings in Germany. Cum ex transactions are share transactions where parties can obtain multiple refunds of in this context, capital gains tax that had only been paid to the German fiscal authorities once.In light of this, the Frankfurt General Prosecutor's Office (Generalstaatsanwaltschaft Frankfurt) has filed charges against a lawyer from Frankfurt and five former employees of HypoVereinsbank for serious tax evasion in the years 2006 to 2008 amounting to more than €100 million and committed via the company of a now deceased private real investor.
As the indictment has now been served, the Wiesbaden District Court is to decide on the admission of the indictment after the accused persons have expressed their views on the allegations. Nationwide, several public prosecutor's offices are also investigating the matter with some financial institutions involved already paying fines. Currently HypoVereinsbank has reimbursed the German tax authorities for any financial damage.
Among legal experts however, opinions differ as to whether the cum ex deals are illegal businesses. Investors in this case have argued that they have only exploited a legal tax loophole that had been closed in 2012. A final decision of the Federal Court of Justice is not yet available, but expected in due course.
Local office of the Bamf in Bremen improperly approved asylum requests
As a result of the scandal over the alleged corrupt and improper granting of more than a thousand requests for asylum, the Federal Ministry of the Interior has announced that the Bremen branch of the Federal Office for Migration and Refugees (Bundesamt für Migration und Flüchtlinge, Bamf) will no longer be taking asylum decisions. Interior Minister Horst Seehofer (CSU) suspended the processing of applications at the migration office in the city of Bremen after an internal review of 4,568 asylum cases clearly showed that branch officials had deliberately violated legal rules and internal regulations. Mr Seehofer explained that the trust in the quality of the asylum procedures and the integrity of the welcome center in Bremen had been "massively damaged" by the illegally granted asylum decisions.
The processing of the asylum procedures of the arrival center in Bremen is to be taken over by other branches of the Bamf with immediate effect. Mr Seehofer had ordered that all administrative processes of suspected employees should be reviewed by Bamf for quality assurance, this includes a random sample of 10% of the asylum decisions.
The public prosecutor's office of Nuremberg-Fürth has said that between 2013 and 2016 at least 1,200 asylum requests may have been wrongly approved without adequate legal basis by the local office in Bremen. The prosecutors are investigating the Bamf director Jutta Cordt, the former head of the local office in Bremen as well as other employees, inter alia, in relation to allegations of corruption and assistance to unauthorised residence.
Representatives of container company P&R under investigations for fraud
The Munich Public Prosecutor's Office is investigating the insolvency of the container company P&R, once the world’s biggest lessor of shipping containers. P&R had mainly sold containers to private investors, whilst its sister company in Switzerland also rented out the containers to shipping companies, and P&R later bought back the containers from the investors, partly at pre-guaranteed prices. According to initial findings of the insolvency administrator, Mr Michael Jaffé, the company from Grünwald near Munich had sold nearly one million more shipping containers to around 54,000 investors than it owned. The prosecution authorities are now investigating former and current managers of P&R on allegations of fraud. According to a spokeswoman, the prosecutor's office is targeting a larger number of suspected persons. It did not say how many suspects there were but said two people targeted by the investigation had expressed their willingness to cooperate with the authorities.
P&R entered into bankruptcy in mid-March. At the time, it was said that the rental income from the container fleet, which P&R leased to ship owners and leasing companies, was no longer enough to meet its obligations towards investors who had invested around €3.5 billion in the containers. According to Jaffé, P&R investors have bought around 1.6 million containers as an investment, but the fleet eventually consisted of just around 600,000 containers. The gap had been growing ever since 2007.
German prosecutors charge football officials with tax evasion tied to FIFA
Frankfurt prosecutors have charged two former presidents of the German Football Association ("DFB"), Wolfgang Niersbach and Theo Zwanziger, and the organisation’s ex-secretary general, Horst Schmidt, with tax evasion linked to allegations that they bribed FIFA representatives for votes to host the 2006 World Cup.An investigation was launched in 2015 where offices of the DFB as well the homes of its officicals were raided. The allegations have also been probed by Swiss officials and FIFA's own Ethics Committee.