Cum-Ex tax scandal: Federal Court of Justice confirms prison sentence for fund manager

Cologne. Günter G., former managing director of the Luxembourg fund company Sheridan, has to go to prison: The 1st Criminal Senate of the Federal Court of Justice (BGH) has rejected the defendant's appeal as unfounded. The procedure is now legally concluded. The BGH announced this today (file number 1 StR 305/26).

G. was managing director of fund companies in the Luxembourg Sheridan Group. Together with other people involved in the crime, he set up sub-funds whose shares an accomplice sold to wealthy private investors. The defendant passed the collected money on to a Maltese or Irish company, the so-called Malta or Ireland structure. He also made the capital available to various US pension funds.

In 2011, those involved used this capital to carry out spot and forward transactions on German stocks around the dividend record date. The so-called cum-ex transactions followed a well-known pattern: the actors traded shares with (cum) and without (ex) dividend entitlement, with the result that the tax authorities refunded unpaid capital gains tax.

The alleged US pension funds acting as short buyers applied to the Federal Central Tax Office for a refund of capital gains tax and solidarity surcharge totaling more than 460 million euros. They invoked double taxation agreements and presented incorrect tax certificates.

According to the court's findings, the defendant and his associates knew that no appropriate taxes had been withheld and paid.

The tax evasion largely failed. In only one case did the authority wrongly pay out almost one million euros. In the remaining cases, the Federal Central Office refused reimbursement. Therefore, the charge is essentially one of attempted tax evasion. However, it remains punishable.

As a reward for his contribution to the crime, the defendant received a right to profit from one of the Sheridan companies worth more than 1.5 million euros. In addition to the prison sentence, the court ordered the confiscation of the stolen property. The confiscation also remains valid.

On November 3, 2025, the regional court sentenced G. to a total prison sentence of three years and nine months for tax evasion and attempted tax evasion in two cases - reduced by three months due to the long duration of the proceedings.

The presiding judge emphasized the defendant's central role in the transactions. It was all about getting a refund for taxes that had never been paid.

In the reasons for the judgment, the judge emphasized that G., as managing director of the now liquidated Sheridan funds, had detailed knowledge of the transactions in all aspects of the crime. “The defendant understood the essence of the business,” said the presiding judge. It is a particularly serious form of economic crime.

The lawyers Hanno Berger and Kai-Uwe Steck, who appeared as witnesses in the trial against G., were significantly involved in the Sheridan business. The two lawyers have also already been in court, but were arrested for other transactions - in particular with the Hamburg private bank M.M. Warburg – condemned.

Steck got away with a suspended sentence because the court emphasized his role as a key witness. However, the Sheridan complex was left out of Steck's verdict, meaning he faces further charges.

The BGH announced that the review of the judgment and the procedure had not revealed any legal errors to the detriment of G. To date, all cum-ex judgments contested in Karlsruhe have essentially stood.