Two former bankers of the money house are on trial in Switzerland.
(Photo: Reuters)
Dusseldorf Coming to terms with the Cum-Ex affair is the number one topic for German law enforcement agencies. A whole hundred people are working on the proceedings against alleged tax evaders in Cologne; the first two processes resulted in convictions against the accused. The Federal Court of Justice confirmed a guilty verdict and classified the offenses as criminal. More than 1000 suspects are still being investigated.
The picture in Switzerland is completely different: As of Wednesday, three lawyers will be on trial in the Zurich Higher Court. The allegation: because they informed German authorities about cum-ex deals of the traditional bank Sarasin, they had committed industrial espionage and violated Swiss banking secrecy.
The accused are Eckhart Seith, Volker Schäfer * and Hans Bott *. Together they made sure that it became public how Bank Sarasin was involved in business to the detriment of German taxpayers. For all three it is the second time through the Swiss judiciary. In the first instance, the judge at the Zurich District Court made no secret of what he thought of her behavior.
For the former Sarasin employee Schäfer in particular, the judge said, the disclosure of the cum-ex deals of his employer was reprehensible: “This reckless and grossly disloyal behavior towards his bread maker works to the disadvantage of the accused Schäfer, and indeed clearly . “
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The court sentenced Schäfer and Bott to conditional imprisonment for betraying bank client secrets and a fine for inciting a crime against the banking law. The German lawyer Eckart Seith received an acquittal in the matter of industrial espionage. However, the Swiss judiciary imposed a suspended sentence for inciting multiple offenses against the banking law. The public prosecutor found that too mild and appealed. The defendants also disagreed. Since then, the verdict has been called “dirty.”
Other countries other manners. In Germany, prosecutors and judges agree that cum-ex deals were illegal. Banks, advisors and fund experts worked together to obtain capital gains taxes by fraud. They traded large blocks of shares with (cum) and without (ex) dividends and pretended to the German tax authorities that there were two owners of the same share. Two parties received a tax certificate for the same tax. The total damage of the Cum-Ex affair is estimated at twelve billion euros.
Sarasin with select customers
When the bank, now known as J. Safra Sarasin, took part in these deals, it was still called Sarasin. It was one of the most respected addresses in the Swiss money industry, with roots going back to 1841. In 2009 and 2010, it sold cum-ex systems for the Munich fund company Avana and the Luxembourg company Sheridan. Customers included drugstore entrepreneur Erwin Müller, former AWD boss Carsten Maschmeyer, his wife Veronica Ferres and meat manufacturer Clemens Tönnies.
Business ran for a while. The customers received double-digit returns, Avana and Sheridan earned splendidly, and Sarasin took high commissions for the brokerage – eleven million from Avana alone in 2009. But in 2011 the party was over at the German taxpayer’s expense.
The Federal Central Tax Office stopped the transfers in the case of the Sheridan funds. The investors not only lost the promised double-digit return, but also a large part of the capital invested. The Sarasin customers were in a storm. Drugstore entrepreneur Müller went to court at the beginning of 2013 – and finally wrestled the bank in a lawsuit that lasted for years.
His trump card was his lawyer. Eckart Seith made contacts in Switzerland. This included Schäfer and Bott, two Sarasin employees. Schäfer was responsible for compliance, while Bott worked in the private clients department. Both of them were uncomfortable with their bank’s cum-ex deals.
“I came to Sarasin in mid-2009 and, among other things, was responsible for checking financial products for compliance with the law,” Schäfer remembers today. “When I heard about Cum-Ex deals, I repeatedly expressed concerns.” His superiors continued anyway – and kept Schäfer away from Cum-Ex deals, even though this was part of his core area of responsibility.
The lawyer and the insider
When it went wrong, he found out anyway. Customer Müller asked for his contribution to the Sheridan fund distributed by Sarasin back – 50 million euros. The bank refused, Schäfer found, for flimsy reasons. Today he says: “I could see how the bank lied to customers after the Cum-Ex fraud in order to fend off claims for damages.”
In the spring, Schäfer and Bott met the Müller lawyer in the Santa Lucia restaurant in Schaffhausen. They exchanged information, then documents. Since then, it bolstered his application. The bank quickly suspected where the details in his pleadings were coming from. She filed a complaint against Schäfer and Bott.
The Zurich public prosecutor’s office started the investigation – and found the alleged traitor. In May 2014, Schäfer was held in custody for six months. Bott was also persecuted and later also went to prison.
It was still too late for the bank. Since then, the Sarasin whistleblower has not only used the information for his customer Müller, but also made copies for German authorities. In the cum-ex scene, Seith’s private investigations are regarded as a kind of initial spark for coming to terms with the affair throughout Germany.
In autumn 2014, the Cologne public prosecutor’s office spearheaded an international raid with searches in fourteen countries, with Bank Sarasin at the center. The secured documents provided countless points of contact with other banks and investors. The Cologne public prosecutor’s office alone is currently conducting 80 proceedings with more than 1,000 suspects. The authorities have already indicted an ex-Sarasin banker. However, the Swiss citizen evaded the proceedings before the Bonn Regional Court.
Bank Sarasin does not want to comment on its cum-ex affair or the criminal proceedings. Despite the impending trial, Seith is at peace with himself: “We have exposed serious crimes,” he says. The Zurich judiciary, on the other hand, has been doing everything to cover up the crimes since 2014. It is all about promoting domestic prosperity, no matter how criminal the source is.
Seith calls the proceedings against him and the two former Sarasin bankers a “judicial crime in the service of organized economic crime”.
* Name changed
More: The Avana case – the Munich public prosecutor’s office will soon bring charges in the next large Cum-Ex complex.