Court sentences former Maple bosses to more than four years in prison

Frankfurt The presiding judge, Werner Gröschel, identified “very considerable criminal energy” in the main accused when he announced and justified the verdict on Monday afternoon. Wolfgang Schuck (69), CEO of Maple Bank for many years, is to go to prison for four years and four months for tax evasion. The former managing director H. (58) receives a sentence of four years and two months for his involvement in cum-ex deals.

It was too late for both of them to apologize to the court for their actions shortly before the decision was made. He deeply regrets having been involved in cum-ex deals, said H. “I should have realized they were indecent because I always thought I was a decent person.”

With the verdicts, the Frankfurt Regional Court is a good deal below the demands of the Attorney General’s Office, which had demanded well over five years in prison in each case. Only the former chief dealer (62) got off lightly with two years of probation. The court credited him with the fact that he cooperated with the public prosecutor’s office at an early stage, helped to clarify the matter and confessed.

Judge Gröschel explained that only those who, like the chief dealer, were cooperative with the public prosecutor’s office could hope for a reduced sentence. “Those who do not contribute to the investigation must expect prison sentences of several years. That’s the message that needs to come across clearly,” the judge said. “The verdict is a very good and important signal from the judiciary that cooperation and clarification are honored,” commented defense attorney Alfred Dierlamm on the court’s decision.

The court sentenced the fourth defendant to three years and six months in prison. This is only three months less than the prosecutor’s office had demanded.

Germany’s biggest tax scandal is thus richer by another judgement. For about twenty years, banks and investors enriched the general public by trading stocks with (cum) and without (ex) dividend entitlement in a circle. In doing so, they managed to get a refund of taxes that had not been paid.

Former North Rhine-Westphalia Minister of Justice Peter Biesenbach called this “industrial tax evasion”. The work has been going on for around ten years. The first main hearing began in 2019, and all processes ended with convictions.

The Maple case stands out, and not just because of the amount of damages. In total, the tax authorities incurred damage of 388,557,251 euros during the crime period, the prosecutors wrote in their indictment. This surpasses almost everything that the investigators themselves encounter in serious tax crime.

Business done under one roof

Another peculiarity was the shirtsleeves of the Maple bankers. Usually, cum-ex deals were characterized by a finely tuned apparatus. Tax fraud stocks were borrowed, sold and bought by various market participants. Everyone pretended not to know each other. So each individual could claim not to know anything about reaching into the tax fund twice.

At Maple, on the other hand, the cum-ex deals were handled under one roof. “Maple Bank elected to conduct its share transactions in a circular structure within the Maple group throughout 2006-2007 (and for some into early 2008 as well),” prosecutors noted. Complicated agreements with external parties were partly unnecessary and the Maple bankers were able to claim a larger part of the crime.

It paid off – at least for the men at the top. The five heads of Maple Bank earned more than 150 million euros between 2006 and 2011. In some years, Wolfgang Schuck received more than the then head of Deutsche Bank, Josef Ackermann. He loved luxury, resided in the Taunus in a villa with a park-like property and had a veritable fleet of cars.

Schuck’s role at Maple Bank was undisputed. In internal e-mails, employees referred to him as the “godfather”, while a co-defendant called him “ruler of all classes” during his interrogation. Schuck was fully involved everywhere and ultimately made the decisions.

Investigators speak of targeted misrepresentations

According to the findings of the investigators, Schuck did not want to give up this role even when it was already very dangerous. In 2009, when, after an audit by the tax office, there were signs of claims for double tax refunds, Schuck tried to prevent this with “targeted false statements”.

According to the indictment, Schuck invited representatives of Commerzbank, Dresdner Bank, the Dutch Fortis Bank and the Swedish SEB to the five-star Hotel Juana in southern France for a long weekend at the alleged time of the crime. Prosecutors have also targeted these four banks for their cum-ex deals.

>> Learn more: Podcast Handelsblatt Crime: Landesbanks sink into the cum-ex swamp

Of course, unauthorized agreements were denied to the outside world. According to the indictment, the investigators found it “astonishing” that the Maple managers apparently believed that they could invite their partners on a luxury trip on the one hand, but on the other hand pretend to the tax authorities that there were no agreements with these partners.

However, the court did not believe this information. Schuck and colleagues not only have to go to prison, but also have to make amends for the damage they have caused to the general public. Schuck is to pay around three million euros from previous proceeds of the crime and a fine of almost 100,000 euros, Managing Director H. even 5.7 million euros.

The next lawsuit is against Freshfields lawyers

The former law firm of Maple Bank is already ahead on this issue. Freshfields Bruckhaus Deringer advised Schuck & Co. on the cum-ex deals. In 2019, the law firm paid 50 million euros to the bank’s insolvency administrator.

At the beginning of 2021, another ten million euros went to the Treasury. In this way, Freshfields was able to avoid being involved in the process as a so-called collection party.

For the individual lawyers, however, the chapter on tax evasion is not over. Ulf Johannemann, for example, who was promoted to global head of Freshfields’ tax practice in mid-2016, was arrested in 2019 and was only released on bail.

The Frankfurt Public Prosecutor’s Office accuses Johannemann of “systematically advising on the planning and implementation of the illegal cum-ex short sale structures”. Before the end of the year, he too is to be seated in a dock with a former colleague.

More: Investigators in Fitschen’s apartment – the public prosecutor’s office continues the cum-ex raid on Deutsche Bank