Belfast Telegraph

Northern Ireland banker’s trades were astronomic, trial is told

A Northern Ireland-born banker on trial over a massive fraud against the German state earned millions of euros from
A Northern Ireland-born banker on trial over a massive fraud against the German state earned millions of euros from "astronomical" trades that facilitated bogus tax refunds, prosecutors have told a court.

By Staff Reporter

A Northern Ireland-born banker on trial over a massive fraud against the German state earned millions of euros from "astronomical" trades that facilitated bogus tax refunds, prosecutors have told a court.

Millionaire financier Martin Shields (41), who is originally from Co Down, is being tried in Germany alongside colleague Nicholas Diable (38) over a share trading scheme which prosecutors allege has cost the state more than £400m.

German media has described the case as "the biggest financial fraud trial" in the country since the Second World War.

Shields said the complex form of trading, known as 'cum-ex', meant that multiple tax reclaims could be generated.

The state was misled into thinking stocks had multiple owners, with each owed a dividend and a tax credit - and believes it cost Germany more than €5bn in total.

It's believed Shields made €12m from the deals between 2005 and 2012 under investigation.

"The number of trades going through the market was astronomical," Shields told the court in Bonn. "Trades regularly exceeded 100% of (the company's) market capitalisation."

On Wednesday, Shields - whose evidence may be critical in the pursuit of others potentially involved in the fraud - told the court: "I am not before you to deny my involvement, but to explain it."

It's alleged Shields and co-accused Diable targeted companies such as BMW and Lufthansa using a network of traders and lenders that would make double tax reclaims with fake share trades.

Shares would be traded quickly around banks, investors and hedge funds, giving the impression of multiple owners, each entitled to a tax rebate.

If convicted, the pair could face up to 10 years in jail.

The case continues next Tuesday.

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