Ulf Johannemann, the as soon as World Head of Tax on the Biglaw agency Freshfields, has been sentenced to 3 and a half years in jail by a German court docket.
At difficulty was tax recommendation Johannemann supplied to his shopper Maple Financial institution. He devised a mechanism for the corporate to say a tax credit score they hadn’t paid. In response to prosecutors, Johannemann’s recommendation gave the scheme a “supposedly authorized look.”
Roll on Friday has particulars on the way it all labored:
The ex-tax chief was in court docket in reference to professional opinions he gave from 2006-09 endorsing the so-called ‘Cum Ex’ buying and selling scheme to a shopper, Maple Financial institution (now-defunct). The tax association concerned treating a share as having two homeowners, in order that each events may obtain a refund of capital beneficial properties tax which solely one in all them had truly paid.
The Cum Ex tax-dodge, signed off by Johannemann, enabled Maple Financial institution to reclaim EUR383 million in tax which it by no means paid. When German authorities determined the scheme was illegal they closed down the German arm of Maple financial institution. The financial institution’s directors sued the agency, and Freshfields (or its insurers) paid out EUR50 million to settle the declare. Freshfields additionally paid a voluntary EUR10 million to the German tax authority in 2021, in a deal to keep away from any prosecution over its recommendation to Maple Financial institution.
The agency has try and distance themselves from their former accomplice — Johannemann left the agency in 2019, shortly earlier than his arrest. A agency spokesperson made the next assertion:
“Freshfields was not a celebration to those proceedings and won’t be commenting on the end result. We proceed to work with the authorities, inside the boundaries of our skilled obligations, in an effort to study from and draw a line below these issues.”
Johannemann can enchantment the sentence.
Kathryn Rubino is a Senior Editor at Above the Regulation, host of The Jabot podcast, and co-host of Considering Like A Lawyer. AtL tipsters are one of the best, so please join along with her. Be at liberty to e mail her with any ideas, questions, or feedback and comply with her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.
