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Ulf Johannemann, the as soon as World Head of Tax on the Biglaw agency Freshfields, has been sentenced to a few and a half years in jail by a German court docket.
At situation was tax recommendation Johannemann supplied to his shopper Maple Financial institution. He devised a mechanism for the corporate to assert a tax credit score they hadn’t paid. Based on prosecutors, Johannemann’s recommendation gave the scheme a “supposedly authorized look.”
Roll on Friday has details on the way it all labored:
The ex-tax chief was in court docket in reference to skilled 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 house owners, in order that each events may obtain a refund of capital positive factors tax which solely one among them had really 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 companion — 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 result. We proceed to work with the authorities, throughout the boundaries of our skilled obligations, in an effort to study from and draw a line below these issues.”
Johannemann can attraction the sentence.
Kathryn Rubino is a Senior Editor at Above the Regulation, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the perfect, so please join together with her. Be at liberty to electronic mail her with any ideas, questions, or feedback and comply with her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.
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