Switzerland has approved a request to extradite a former U.S. law firm partner, a key figure in the ‘cum-ex’ tax fraud scandal, to his native Germany, where he faces trial.
The Swiss Federal Office confirmed that the Federal Supreme Court had rejected Berger’s appeal against the extradition, and as such, the order which was first made in August 20, 2021, “has become legally binding and can be executed”.
Only extradition requests for “particularly serious” fiscal offences are accepted by the Swiss authority, according to the authority’s website.
Berger is a prominent German tax lawyer. He was a tax auditor for the Frankfurt tax office before becoming a partner at German law firm Pünder, Volhard, Weber & Axster — now part of Clifford Chance. He then joined Shearman & Sterling in 1999 before moving to now-defunct U.S. firm Dewey Ballantine — later Dewey & LeBoeuf — in 2004, before finally leaving to establish his own firm in 2010.
Damages have been estimated at around €150 billion globally, with cum-ex and similar transactions causing tax losses of at least €35.9 billion between 2000 and 2020 in Germany, according to research by the University of Mannheim and investigative organisation Correctiv.
Both the Hessian and the North Rhine-Westphalian judicial authorities had applied for the extradition of the German lawyer, with the Hessian authority confirming “the extradition of an accused lawyer in a cum-ex trial” in a statement.
The Westphalian authority confirmed that Berger had appealed the extradition, but that it had been dismissed. “The approval decision of the Swiss Federal Office is final,” a spokesperson said. “We expect delivery to take place shortly.”
Berger is accused of complicity in serious tax evasion and commercial fraud for his role in the cum-ex scandal, which saw parties reimbursed twice by the German tax authorities for taxes that had not actually been paid.
According to local press, Berger has repeatedly denied the allegations and insisted that the model was legal, but Germany’s top court upheld the illegality of the model in a key ruling last July.
He was to stand trial in Germany for his alleged involvement in the scandal in October 2020, but did not appear at his trial and was unreachable by German authorities due to having relocated to Switzerland eight years prior, when investigations against him had begun, prompting the extradition request.
Hesse’s Minister of Justice, Eva Kühne-Hörmann, said in a statement that the approval of the extradition demonstrates the strength of the rule of law.
“The great perseverance of the authorities involved is now bearing the deserved fruits, so that the basis has been laid for a Hessian court to be able to administer justice in this important matter,” she said. “I would like to thank the Hessian Ministry of Justice, the Frankfurt Public Prosecutor’s Office and the Swiss authorities for their great commitment to the rule of law.”
Partners at major law firms in Germany have warned that cum-ex litigation will likely continue for at least five years, with further alleged tax evasion models also coming to light in Germany.
