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A British hedge fund trader at the heart of Europe’s sprawling “cum-ex” dividend scandal has been sentenced to 12 years in prison by a Danish court for defrauding the Nordic country of DKr9bn ($1.3bn).
Sanjay Shah, who was extradited from Dubai last year, was the mastermind behind a system that led to the refunding of billions of euros of dividend taxes that had never been paid, the Danish judges found.
The court also ordered the confiscation of DKr7.2bn from Shah, who immediately after the sentencing on Thursday said he would appeal.
Several European countries including Denmark, Germany, Italy and France were hardest hit by the cum-ex scandal in the 2010s. Prosecutors in Germany are investigating 1,500 people over the scandal while Denmark claims it was defrauded of a total of almost DKr13bn and has brought charges against nine defendants.
Shah denied any wrongdoing, arguing that he had merely exploited loopholes in Danish law in order to be paid.
The trader and his hedge fund Solo Capital Partners are also facing a British civil lawsuit brought by Denmark’s tax authority to recover £1.4bn in refunds.
The case was described by one judge in London as “one of the largest and most complex pieces of litigation” to be heard in the UK commercial courts with Skat, the Danish tax authority, presenting about 250,000 pages of documents.
The 12-year sentence against Shah for fraud is the largest imposed in Denmark for an economic crime.
In an interview broadcast shortly after his sentencing, Shah told Danish television station TV2 that he was “a greedy bastard” and that siphoning the money out of the Danish treasury had been like “playing Space Invaders”, where he wanted to beat his previous top score.
The court in Glostrup just outside Copenhagen found he had a “central and controlling role in a crime that was carefully planned and systematically organised”, with thousands of dividend refunds submitted.
It added that the three-year duration of the crime, and the facts that Shah had personally enriched himself and that his actions were only brought to an end when tax authorities stopped the payments in 2015 due to suspicions of fraud, all meant there were “particularly aggravating circumstances”, leading to the imposition of the harshest prison sentence possible.
Preben Bang Henriksen, an MP for the ruling Liberal party who is also its legal spokesperson, hailed the judgment as showing “a harsh punishment awaits you when you steal from Denmark”.
Shah had argued that it was impossible for him to receive a fair trial in Denmark after a number of members of the government commented on the case, including foreign minister Lars Løkke Rasmussen who welcomed the Briton’s extradition as a sign that “you cannot achieve impunity by staying abroad”.
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