Dusseldorf Hanno Berger wasn’t there when his money was at stake. A week ago on Tuesday, his three lawyers met with two judges and two prosecutors at the Bonn Regional Court at 10 a.m. The accused Berger was parked in the demonstration area of the district court if a consultation was required. The delicate conversation itself was conducted by his defense attorneys without their impulsive client.
Berger, once a star lawyer in German tax law, is in the dock in Bonn. The public prosecutor holds him responsible for a tax loss of 278 million euros. Means to an end were cum-ex deals. Those involved had taxes refunded that they had not paid at all. Berger advised as a tax attorney and recruited investors.
Berger has always denied that cum-ex deals are illegal. The possibility of double tax refunds is due to a legal loophole, the 71-year-old told Handelsblatt and others. Exploiting loopholes in the law is not illegal.
Berger’s argument has a catch: every court that dealt with it came to a different conclusion. The Cologne Finance Court declared that it was “logically impossible” to have a tax refunded twice.
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The Federal Court of Justice ruled that cum-ex transactions are punishable. The Federal Fiscal Court ruled that they were illegal under tax law. The Federal Constitutional Court ruled that all profits from cum-ex transactions can be confiscated.
This is how Berger’s payday suggests itself. He faces 15 years imprisonment at the Bonn Regional Court. In the conversation on July 26, his defense lawyers wanted to find out how Berger could reduce his sentence. Would a confession help?
Payment is crucial – but Berger’s money is said to be gone
Sure, said presiding judge Roland Zickler. But Berger must do more. He himself is said to have earned more than 13.6 million euros in the transactions that are being negotiated before the district court. It is important for the court that the damage caused to the taxpayer is healed. Therefore, “a payment by the accused … is of particular importance for the progress and outcome of the proceedings”.
Berger’s lawyer objected. One recognizes the importance of the payment, said Richard Beyer. Only: there was “hardly any more assets with the accused. Much has already been transferred to third parties in the past for reasons of possible liability”.
Berger, his lawyer explained, had also spent his money unhappily. As an example, he named a property in Schluechtern-Elm in East Hesse. Berger invested “certainly well over 20 million euros” in his local wood yard, “without this having led to an objective increase in value of equal importance.”
Beyer stated that Berger’s daughter was “quite willing to support the accused financially”. But their resources are limited. Berger also intends to “sell or auction” his property. However, “certainly no proceeds can be expected” from this, which come close to the 13.6 million euros that the court is demanding. Berger’s property in Switzerland is “already heavily burdened and is also located in a rather difficult region for the real estate market.”
The contents of the conversation are known because they were read out at the most recent hearing at the Bonn Regional Court. There are many stories about Berger’s wealth and his relationship with money. A lawyer colleague told the Handelsblatt years ago that Cum-Ex had made Berger “three digits” – that is, that he had earned more than 100 million euros with it. Berger himself told the Handelsblatt that he “personally didn’t make any money with cum-ex deals anyway.”
Colleagues from Berger report that he is a hedonist on the one hand, and “pathologically stingy” on the other. When traveling to Switzerland, Berger, his wife and daughter would have brought a neck pouch with them – for a cash payment at Bank Sarasin. On the return journey, there would have been 10,000 euros in each bag.
A prosecutor’s witness testified that Berger owned several hundred kilos of gold. When he instructed his caretaker to drive the treasure to Switzerland, the car almost collapsed under the load. Berger denied having ever owned gold in such quantities.
Well it would be better if he had. The more Berger can pay, the lower his guilt, the court explained to him. Prosecutors supported this. Prosecutor Jan Schletz said that Berger could “do something good for himself” with a confession, but above all with a payment and shorten the process.
Berger’s lawyer told the court that his client “now wants to calculate his financial situation and put together the necessary things.” It’s not all that simple. Beyer: “Mr. Berger will go into himself again.”
The presiding judge then had another suggestion: “With regard to the behavior of the night and the procedure shown with regard to employees of the financial and investigative authorities, the accused can certainly do something for himself with an apology.”
The first thing Hanno Berger did after his alleged crime was to attack, the second to flee. In 2011, a clerk at the Federal Central Tax Office refused to issue tax refunds in the three-digit million range for cum-ex transactions in which Berger was involved. A fellow attorney later reported how, at Berger’s behest, he targeted the woman.
Berger pulled out all the stops
“We said we would sue them personally for damages,” the attorney said. “It was about sums that would completely destroy their financial existence.” The clerk remained steadfast.
When investigators searched his office and private rooms in November 2012, Berger fled to Switzerland. From there, in the picturesque mountain village of Zuoz, Berger sometimes railed against “left-wing fascist and communist” developments in his homeland, sometimes against “Nazi conditions”.
For nine years, Berger hid from the “saubande”, the “filthy pigs” and “ass fiddlers in Cologne”, as he called the local public prosecutors. Berger told his daughter that he wanted to “slap the investigators in the mouth”. He described chief prosecutor Anne Brorhilker as “little aunt”, “little gray mouse” and “cow”.
A former colleague reported on a meeting in mid-2016 at Zurich Airport. Berger had him and others “sworn to a common line,” said the man. An investigating officer should be overwhelmed with ads. He recalled the words: “If we continue like this, we will win. The prosecutor is only at the beginning of her criminal career.”
Berger had many such ideas. In his decades of work, first as a tax officer, then as a tax attorney, he established a close-knit network of contacts. At the beginning of 2016, Berger believed he could convince the Cologne Finance Court of his view of things. He has a specific contact there. A colleague on the conversation with Berger: “He said I could be sure … the right people would make the right decisions.”
>> Read here: Why the state banks are deep in the cum-ex swamp
The court ruled that it was impossible to refund a tax twice. Berger continued to rage. He reported the Attorney General Brorhilker. He formulated hearing reprimands, complaints against search warrants, bias requests. In between, Berger gave interviews in which he felt sorry for himself as a victim of justice.
Berger was arrested in Switzerland in July 2021 and extradited to Germany in February 2022. His trial at the Bonn Regional Court began in April. At first, Berger wanted to read the riot act to the court and the public prosecutor’s office. The accused had prepared a pamphlet, it was said in legal circles. His lawyers had a hard time stopping him from making angry speeches. In the conversation with the court and the public prosecutor, one of them said that an “excuse for the behavior of the night could definitely be considered”.
Clear statements from the judge
The advantage of an apology: it costs nothing. A repayment is more difficult for Berger. “He just doesn’t want to pay,” says someone who is still in contact with him. Berger also took precautions. Much of his fortune is now probably with his wife, daughter and grandson. The latter gave an interview in May entitled, “What’s it like being RICH KID?”
The court does not want to be traded. The presiding judge Zickler even expressed doubts about the information about Berger’s financial ailments. A former colleague from Berger’s office once said in an interview that he had earned 50 million euros with cum-ex deals, said Zickler. That would leave “room for the assumption that there may still be residual assets”, which would allow the payment of 13.6 million euros.
Wherever the money from Berger’s cum-ex business has gone, one thing is certain, said Zickler. “Anyway, where the money is now, it’s not legitimate. There is not the slightest doubt that the financial situation that has arisen is not legal.”
Then the judge reminded the accused of his own words from October 2017. “You once told the Handelsblatt that you were a man of the law,” said Zickler. “So if the asset situation isn’t right, it’s going to be done right. Then you pay the stuff back.”
More: Serious allegations by the public prosecutor’s office – but the accused Hanno Berger is combative.