and appropriate she warned of is currently impossible to trace the source of 3 quarters of new covert infractions. this is due to the burlesque i'm dr thomas for the entire chain thanks so much for being here. and you hear me now oh yes we don't need you and i last 2 years german sunflower will bring you i'm going to mount a car and you never have surprise yourself with what is possible who is medical really what moves them want. to talk to people and follows her along the way maurice and critics alike join us for metals law stocks.

in the media and the several media reports mention a total of at least $55000000000.00 euros oil. the highest of the century. tax tricks cost authorities billions. the government is covering up its own failures. it may be the biggest tax scandal in german history for years a cascade of revenue flowed unhindered from state coffers exits just perfect the become ex is the perfect crime of this for no and it didn't happen with a pistol and a schema but with a pinstripe suit and a tie. banks and investors took advantage of the law. there was never a loophole it simply theft. the players big banks and super rich investors. only i was able to help clarify a very complex. sure. what that the politicians know. is the

point comics are the state failed blatantly house. fallout from the scandal kept coming. since i couldn't have imagined what would happen what we don't cover. in the end the main victim was the taxpayer but how did the finance sectors conjuring trick work was there a legal loophole or was it fraud pure and simple and who foots the bill for the billions more last. september $2901.00 of germany's biggest tax fraud trials was beginning the 1st criminal case resulting from the comex affair 2 british bankers went before the regional court in the city up on the central question were the comics deals criminal or was there

a legal tax loophole. the fact that the trial took place at all is thanks in part to investigative journalist all of. his reporting brought the scandal to light in 2013 he was working for news magazine show down in hamburg. he took an anonymous phone call and what he heard brought him to what may well be the biggest story of his life. he has it at sword's confidence and i hated it tauriel meetings and so i was probably the only available reporter at stanley let's say because everyone was in the meeting and the receptionist put a call through to me and the caller told me about come eggs and he was because he had a piece i have to admit i'd never heard of comics before but when the person mentioned the names of several german investors legit my ears pricked up because one of the investors was caught. as well as entrepreneur.

there was meat industry boss and soccer club chairman clemens tanya's and drugstore king. these mega rich germans are said to have poured millions into what were attractive investments with high returns all 3 say they didn't know they were involved in suspected come x. transactions they later took action against the bank that allegedly invested their money in the dubious deals. journalist all of us had tasted blood even at this early stage the story was incredible in switzerland he met with informants from the secretive banking world who passed on confidential documents to him the explosive leaks suggested that banks and investors had cheated the german tax authorities out of millions. of research basically

showed that this wasn't tax evasion like someone hiding their money in panama or another offshore country to avoid paying taxes and this was essentially famous and somebody putting their head into the german state coffers when i finally understood that because i suddenly got a sense of the dimension of the whole story on infinite. to become. from began investigating major german consumer banks as well as implement your european private banks he was entering a complex moral the system behind comics was deliberately designed to be opaque to outsiders especially tax authorities. in order to engage in a comics deal 1st you need some company stock on the stock market each shareholder gets an annual payment if the company has made a profit. this distribution of profits is called

a dividend. a share purchased before the so-called x. date is referred to as cum dividend that is it comes with a slice of the annual profit traded on or after that date the share is x. dividend with no slice of the profit. dividends are subject to capital gains tax and it's this tax that's central to the comebacks trick. put simply the process works like this. let's say person a buys a share in a large car company at the end of the fiscal year that company pays out a dividend to a person and. this slice of the company's profit is subject to capital gains tax which the state automatically with 0. person a receives a certificate from their bank and under certain conditions can use it to reclaim the tax from the government. that's the way things normally work on the stock

market but how to come x. transactions work out the frankfurt stock exchange business journalist valerie holler regularly reports on complex financial issues here's her explanation. as i in fact as ak put it simply comebacks shares were pushed back and forth between different investors so quickly the tax authorities no longer knew who actually owns them as a result the capital gains tax was refunded several times even though it was only paid once so the stage we funded more in taxes than it had collected and the investors got back more tax paid in the 1st place i think for have a hope it's not to. imagine a worker paying tax on their income filing their tax return but then getting several tax rebates that's the principle behind come x. to make sure nobody caught wind of their scheme. perpetrators used to skillfully

arrange networks exactly back to the stock market again. importantly trade involve several traders but only one share right now person. then along comes person b. they buy a share of the same company very shortly before the state the cut off date for dividends but person b. doesn't buy the share from the company itself but from person c. . person c. doesn't even own the shares at this point this is called a short sale and it's completely legal now comes the day of the dividend payout person gets their profit minus the capital gains tax and a certificate with which they can get their money back from the state.

there was only one. person to person c. and person c. pass to deliver the share to person b. . person. and mistakenly they also get a certificate from their bank. and there you have it. there's only one share 2 certificates the share is traded back and forth between parties. and mistakenly to. get a tax refund from the state even though only one of them actually paid taxes the profit is then shared by 3 parties.

that's the general structure which shady investors have built up into towering profits because what works on a small scale can work on a large scale to single shares are said to have been pushed back and forth up to 12 times comebacks became a real industry one that all of our sherm's reporting began to shed light on. with his investigation the journalist unleashed a tidal wave in the banking world one that would eventually threaten to engulf him as well he had no idea how big it would be or what scandals were lurking beneath the surface and. an hour's drive from berlin is the small city of in the state of brandenburg among the $26000.00 inhabitants there's little sign of the hustle and bustle of the nearby german capital 'd what do regular taxpayers think about comics

. this is tied after that it's totally exasperating i also think the state is too passive about it it should put more energy into these things. how could this have been going on for so many years given that so many of our lawmakers have legal training it was all fairly close. where those well trained politicians do their work until the end of 28 team hardship was one of them since leaving politics the former green party parliamentarian has been fighting for a more transparent financial system previously as a member of the bundestag he fought for the prosecution of suspected comics perpetrators since. the unit on the one hand there are those who actually carried out these traces on the actual share transactions on the financial market

the investment bankers. are also had to be tax lawyers to examine everything. for these are often tax consultants who came from outside the banks or funds so there had to be consultants and people who set up these structures in the 1st. whole group of people had to be in it together. and it's all the more frightening that they managed to keep it hidden for such a long time. several 100 people are said to have been involved experts estimate 400 participants all of whom acted without scruples. once. it was on a horse and for in the financial world there are people whose greed knows no bounds inside and have to very actively prevent them from robbing you. and these people must be stopped these are large muslim stock. one such person may well be hung over the 68 year old once worked as a tax official for the german state then he switched to the private sector starting

his own tax consultancy. in december 29 teams frankfurt's. an oral prosecutor's office took her to court he's accused of having developed comics as a business model for private clients thereby committing serious tax evasion. in response to our e-mail inquiries farragher wrote the accusations of the frankfurt prosecutor are wholly unjustified in fact they're upsurge december 2019. by 2012 a total of at least $10000000000.00 euros are believed to have been lost to germany through comic straits. that's money that could have been spent on hiring $160000.00 additional teachers. or buying school meals for every school child in germany for more than a year and a half. for funding the ministry of family affairs for

a year or. march 24th teen hamburg almost 4 months after the phone call from switzerland all the fish and his colleagues were still investigating comex evaluating mountains of confidential documents by the end of march they finally had enough evidence they went public with the scandal their focus was on multi-millionaire celebrities and influential swiss banks from knew what he was getting into but what happened next was a complete surprise. i learned weeks or months later that they'd taken a different kind of action the swiss private banks are as enough which was involved in this come ex deal of the expense of the german treasury filed a complaint against me among others. or and desire a public prosecutor's office started an investigation against mr dotson bunch of

the public prosecutor didn't take action against the banks and wealthy investors they took action against the person who made the fraud. good public good namely me as a journalist. the allegation was that shrum had incited bank employees to hand over confidential information according to the media the swiss private bank sarah zene was one of the players in the comics scandal among the clients was german entrepreneur karsten marsh mire trump found himself targeted by the bank. hit the nearest. the city but it wasn't until months later that i received documents from whistle blows again and there it was in a black and white on the bank had hired 2 detective agencies to put me under surveillance which. they planned the banks paid a lot to do with close 210-0000 english pounds shipped food so they were going to

great lengths to find out. because. the story gets even more complicated of all people one of sarah's eans own clients managed to take the high flying financial institution to court drugstore king air when mira. the german billionaire invested almost 50000000 euros in comebacks trades unknowingly according to him miller says the bank misused his money he hired a stuttgart law firm for the case miller's lawyer site says his client was a victim of the bank. the reason was that my client invested in the supposedly secure financial model on the recommendation of the thorazine bank. comex risk double tax refunds. ever came up. in the trial against sarah

xen the parties contradicted each other. but miller's lawyer got some unexpected help from inside the bank. a long time employee passed on internal documents that helped a cut side win the case for miller. the sara zene informant wants to stay anonymous but is willing to talk to us about what he witnessed at the bank. i saw that the bank wanted to sell and had already sold a financial product clearly designed to defraud german tanks authorities when customers bought the product they were told that what they were buying was completely on the level and legal according to the informant the product originated with mr comics himself on

a burger confronted with the accusations told us by email that he only advised a few clients regarding comex and no banks but the former sarah xen employee says otherwise he claims he tried to raise the alarm about burger numerous times at one point i was told very clearly that my reservations were misplaced that dr baer go was an expert in german tax law my boss told me several times that baerga had excellent networks in germany right up to the highest levels of government in berlin i was told he knew what he was doing and that we should just trust him. and it wasn't just happening in switzerland some large german financial institutions were also caught up in the scandal none of them more willing to answer our questions about comics on camera but we did get some written responses. the frankfurt public prosecutor's office is investigating in connection with shared

transactions of comets bank and the former dress that our band performed over the dividend record date so-called come x. transactions coming out sponsors cooperating fully with the authorities. has cooperated and continues to cooperate with public prosecutors investigating criminal offenses regarding possible tax evasion in connection with h.b. billie's comics transactions which affect both hooper for unsponsored self and a former v.p. customer. did not participate in organized comics trades either as a short seller or as comics purchaser however the bank was involved in comics transactions of customers. we did not receive a statement from swiss banks are raising. as all of their trying to gain insight into the secretive financial world we came across an important witness.

as part of our investigation we had an insider i guess right hand man. he came clean in an interview with us he also described a meeting here in frankfurt in the high rise building where his office was. bigger told the group and if anyone here has a problem with the fact that what we're doing prevents kindergartens and schools and roads from being renovated they should please get up and leave you know that no one left the meeting room as of today i mean they didn't know the meaning of the word morality. more to condemn it. when we asked him about these alleged statements response was to say that a lawyer only represents his client's interests and doesn't work for the state worse fuel. why didn't come x. traders seem to care where the money came from was it arrogance or ignorance.

kember business psychologist eva short to alstom knows about the secretive circles of bankers bank of the bankers see their role as 1st and foremost to increase their customer's investment or at least not to let it decrease and given that they consider it absolutely fair and legitimate to evade taxes in order to save their customers money. the more their customers invested the more the suspected comebacks perpetrators made in commissions that meant vigneault money i do not see one of them bought a yacht which he supposedly named come ex ups and throw in there was a broker who had 2 villains on milkha one in the north and one in the south when he was asked why he said there's a 2 degree temperature difference here in winter i mean the one that's a bit warmer and in summer i mean the cooler one though but he didn't die in and these are the kinds of a 1st world problems that come to traitorous faces they don't even know what to do with their money and we need. the high life at the taxpayers' expense thanks to the

state rebates comebacks participants remained in their wealth bubble far from the reality most of us know. journalists like all of the shoreham were stirring up a lot of dirt as they investigated the story and things were about to get even dirtier. back to berlin an important place in the comic saga germany's political establishment has come in for heavy criticism over its handling of the scandal. when humanity 2 of those houses of if someone leaves the door of the house open so these can wander in and they're partly responsible if there is a burglary of a school with come x. the state. discuss it has to be dealt with people need to take political responsibility but. the 1st signs of that failure came early on in 1992

an official in the economy ministry of the state of has reported the 1st comics transactions but 10 years passed and nothing happened. by 2002 at the latest the german government was aware of comics the association of german banks sent a letter to the finance ministry drawing attention to comics deals. at the time the finance minister was hans i should of the center left social democrats he's the only former finance minister to agree to an interview he wasn't at the helm during the peak of comics deals but his term did cover the arrival of the banking association's mutter. job in france to mine outside as finance minister i never heard anything about this topic during my time as finance minister if a sub recently though there was a letter which i later saw from the association of german banks to the finance ministry on a clerical level even a matter stated a clerical often there is

a hole but even at that time it seemed to be a purely technical tax issue not anything that had to do with large revenues or revenue losses to the states to. the stock that's why it never got beyond that level 0 you would use even then you know skookum. but that explanation implies a minister who was unaware of the goings on in his ministry to whom important information wasn't presented. findus it was a bit does that mean is that i find it very plausible that the minister didn't find out about it at the time. when if that doesn't mean he's not responsible that if i vote on his son holds his responsibility is to put systems in place so that people in his department know what's going on. and that didn't happen but that's what was there for. in order to gain more insight into the financial world the ministry also relies on external experts under i shal successor perished and walk there was

another blunder a former fiscal court judge from disallowed or was assigned to among other things come x. that was asking for trouble because the man is suspected of having received payments from banking associations while he was working for the finance ministry on legislation for banking regulation he was given all manner of confidential information sent to his private email account it's believed that he sometimes forwarded the information to contacts in the finance industry. of all people this man also helped create the 1st law designed to prevent comics he used the letter sent by the association of german banks as a template it had been provided to him by the finance ministry under hans i showed the letter included a proposal for the prevention of comebacks which became the basis for the new law it did reduce the state's risk of liability but one crucial loophole was left open

the ability to carry out comebacks deals through a foreign country. the new law was passed in 2007 under finance minister perished comebacks trades were now no longer possible from germany but they could still be done from abroad perished on book success or both come short of law let valuable time slip by before acting it was only in 2012 that legislation finally stopped comics in germany in 2016 opposition lawmakers helped to launch an inquiry to shed light on political aspects of the scandal. is that the for the on of i sort of usually said to the other parties to my why don't we clear this up together if you've got something clearly went wrong and we owe it to the taxpayer you see is what it's pretty hard the. it's on the social democrats rejected the idea. when the inquiry began they said it was unnecessary but in the final report they tried to keep the calculated losses as small as possible or something that's refuted today

when they tried to make it seem as if everyone had done everything right. that's. at the time he was financial policy spokesman for the greens in the bundestag and played a major role in establishing the inquiry the suspicion was that there were numerous failures under finance ministers parish and board. and that authorities were called in too late. the journalist all of us from also followed the inquiry closely. to the finance ministers distinguished themselves by the claim that they remember nothing and know nothing is the 3rd that's kind of a damning indictment that maybe it's true that the information didn't reach the middle of the. that says a lot about the political apparatus or about the ministries that this sort of information would get stuck in the bureaucracy and not reach the very top when he discovered that no decisions were made. that's a tragedy and

a systemic problem and the theme of the. billionaire. was called in as a witness he saw himself as a victim. he reached out so fully i was able to help clarify a very complex issue of me and other investors being cheated out of money by the bank. and there was a lot of money involved comics' was a scheme for the super rich the higher the stake the higher the tax refund experts say that the private investors in the 3 cases mentioned here may have invested up to 300000000 year. another person who came before the committee was the former judge working for the finance ministry . because if it all never forget that one plot was a really hot day everyone was wasting except teams to be polite he was pretty cool people and sitting there in his suit no lawyer with him no documents is an affair

he was pretty sure of himself and other than the mc when he was confronted with a claim that he leaked this information and his own e-mails were read out he just said smugly that's all in the past that's how it was they couldn't get anything on him bothell. the inquiry brought political failures to light even so the final report would later state that the responsible authorities had acted appropriately. today former german finance minister hans ayesha is concerned about the signal the comics affair could send their stuff. that's an invite as the state can't accept this because in the long run in undermines trust in the state criminality we can't of all crimes over the invest not something we'll succeed in doing in the course of human history of what of what we have to equip the authorities so that they catch criminals as much as possible when it wasn't because i think we could do more to make sure that we have the kinds

of laws that ensure criminals get the punishment they deserve it uses for asian fatigue and. it sounds good in theory but as so often the reality is different in switzerland a trial began not against the bankers but against more your zite and his informant the accusation corporate espionage eckart zite had passed on his information to german authorities which significantly advanced the investigation. using i'd highly always schnitt. were one part of an instance of financial market crime. i mean it's organized crime that wasn't clear before it's transnational you have this influence a kind. hobbie i recognized at an early stage and i also inform the authorities in switzerland. they meant that when you are accused and prosecuted for doing that

it's a real full effect built this is. echoed zite was ultimately handed a fine his informant was given 13 months probation after having spent 6 months in pretrial custody. thanks in part to zite investigations were finally underway in germany but a central question was still unanswered was comebacks illegal or not. heed of was that his tion it just everybody knew that you couldn't have a refund on a tax that had never been paid a kind that as you stephen everyone knew the system created money out of nothing at the expense of the treasury bonds were lost in the stocks cause it or didn't. i don't need any special legal expertise to know that that's simply not ok gate and yet the perpetrators continue to help themselves from state coffers even though

they already had plenty. of this at some point it was no longer about the money at some point it was just about the thrill i get just because eventually there is enough money more than you can spend in a day a week a year or maybe a new whole lot to mention but it's the thrill that drives people to do very risky thing else including high stakes speculation so the idea of getting caught and what will happen if someone finds out that your current. if comics was just a game for bankers and investors then that's a real slap in the face for the millions of ordinary citizens who conscientiously pay their taxes. in early summer 2017 all of us and his journalist colleague christiane son of school were in switzerland they'd tracked down mr come x. hano paragraph. hot on his heels the 2 journalists wanted to confront berger with

the findings of their investigation. very eloquent and friendly man if you have to get him on the phone but then he see with expertise and drowns even complexity that's going on bothering you with technical essays and so on to make it clear that from his point of view the whole thing was legal and he's an innocent being prosecuted in short. we haven't been able to speak to him personally except on the phone. isn't it a form of mr berger i'd just like to meet with you. mr baird to spare me your expert report let me tell you the glued up with. christiane

zalewski had joined the at times bizarre comics reporting beat in 2016 together with other colleagues celeste ski and continue to evaluate insider information and meet with whistleblowers they began to uncover new details that revealed the extent of comics. and among the mountains of files on our tara we had a very early e-mail from how it meticulously sent out the legal situation in all european countries exiles on throwing the question where can we deploy this. very thorough and if the plan of the law for the question was was it hypothetical did they really carry out this plan in the title because it's. in fact unknown comebacks perpetrators were beginning to act abroad once the practice was no longer legally possible in germany it's said to have continued in northern europe like

here in denmark. the danes are still waiting for an explanation as to why the german government didn't warn them earlier at the time then danish tax minister cautioned the outlets and turned to berlin for assistance we have very good relations on different matters but when it comes to. especially when it comes to this comic scandal the level of cooperation has been very loyal i have a really i really honestly can't understand why the german government and the minister of finance didn't prochoice cooperation it would have been likely at that the fraud in denmark would have been discovered earlier and could have been stopped earlier. by 2015 denmark is estimated to have suffered losses equivalent to $1700000000.00 euro that means that in per capita terms this is candle may have hit denmark even harder than germany come next perpetrators were also attracted to

other countries and the journalists now chased their story across european borders . doesn't like it and we soon realized we needed cooperation among european journalists and i can't speak polish i can't speak spanish i don't know the ins and outs of tax law renate countries without us we're peons wouldn't have been. doubt that their countries might have been planted as the open they are. in november 28th the e.u. took notice of the tax scam partly thanks to all of us and his colleagues the journalists went before the european parliament to explain the extent of the problem. in d.c. in these countries tax revenues are being raided right now. he cites germany by 2015 comics trades were also happening in denmark and austria later similar models appeared to have been used in france italy spain norway

finland poland and the czech republic. it was now a european scandal uncovered thanks to international cooperation among journalists even then the e.u. didn't initiate any investigations saying instead that the problem was to be solved primarily at the national level. but some members of the european parliament did want to hold each new institutions to account among them german green party m.e.p. spending gold that's so popular in the european parliament asked the european ranking all 13 and the european securities and markets orthorexic to launch an investigation it took months because the national supervisors didn't want to. according to gold those at the national level like member states finance authorities delayed the investigation to prevent their own failures from coming to

light it took pressure from the european parliament to put the investigations in motion there still ongoing. debugger for citizens lose faith that the state is there for everyone that's a very dangerous if people feel there are 2 kinds of justice one for the little people who have to abide by the law and who get severely punished if the. and another for the powerful who say this wasn't a crime at all it was just a trick i mean the the fire in one take. after years of draining state revenue the practice of comic share trades does seem to have dried up but there are always new breeding grounds for this type of practice. and consequently haven't learned the crucial lessons that we should have from the comics affair. even after 2012 when actual comics trades were no longer technically possible similar things kept on happening for the symbiote or. this.

after comebacks came come come then come fake they're similar models resourceful financial traders are always on the lookout for tax loophole. experts estimate the europe wide damages from comics and its successor models to be $55000000000.00 euro the largest part of that was taken from german tax authorities almost $32000000000.00 euro. there are ideas for new safeguards to strengthen tax laws but so far they're just that i.d.s. . it's a small force. one suggestion is to have a european financial police force where investigative threads can come together instead of all 40 sporadically sharing bits of information here and there and i

need someone to really gather information and take concerted action against white collar crime again this is also the idea that tax advisors and financial advisors should have an obligation to report any legal loopholes they come across it's great to be an offense not to report them less than it sounds somewhat trivial now but at least it would be a step in the right direction. if you don't. there's still no such obligation but the justice system has begun to deal with the issue. and bought a stick yes it's the 1st criminal trial in the so called come x. if it has begun then 2 british investment bankers have been charged. in september $2900.00 suspected comebacks perpetrators stood trial for the 1st time the case was an opportunity to clarify whether comics was illegal and who would pay

for the billions in damage best performing length of its border to the trial at the regional court and only addresses one piece of the puzzle that was like a rift in a feeling this is going to occupy our courts for years to complex for until all the aspects of comics are covered the details into some of the perpetrators are abroad if you like from some of the money may be long gone feels bad burn through there's no way we'll get everything back the lists or. had to wait 6 months for a verdict to be handed down in that trial the fact that the 1st suspected perpetrators landed in court at all was due to the journalists were uncovered the dubious dividend deals despite being shadowed and even becoming a target of the authorities himself ultimately the investigation against bush dropped the end of the story for him for now at least civilities comics and the chill come eg seems like

a financial crime novel but it's reality not fiction so i couldn't have imagined what would happen what we don't cover but realities like that so this is this is one of the biggest tax rolls in european history. and what of come ex-pats to mind burger after mom deliberation the vase budden regional court approved an indictment against him for tax lawyer still claims he did nothing illegal. in a liberal constitutional state everything is allowed unless it's forbidden. whether comebacks was legal is now a matter for the courts the other remaining question is who will repay the billions lost. money will always flow into the hands of the greedy the comics case is the perfect example and no country's justice system has so far been able to completely

stop such wheeling and dealing. one continent. 700000000 people. with their own personal stories. explore every day life. what europeans fear and what they hope for. some cause on the early. 90 minutes on d w. how does

a virus spread. why do we panic and when we'll. consider 3 of the tactics that we've covered and weekly radio show is called spectrum if you would like any information on the. on a virus or any other science topic you should really check out our podcast. your podcast you can also find us at. science. it was the 1st international tribunal in a string. the number of trials. 75 years ago a high ranking officers of the nazi regime were endangered by the allied forces. they were the 1st war criminals to be held accountable for their crimes. our 2 part series. in the talk starts november 12th on t.w. .

this is the news live from a deadly knife attack in a church in the french city of nice the country's antiterrorist prosecutors have launched a murder inquiry. german chancellor angela merkel says new measures are necessary and appropriate addressing the bone to stop the chancellor tracing the source of all new infections is currently impossible but the opposition says the new rules are excessive.