Trader Loses Cum-Ex Case as Ex-Banker Placed on Interpol List

A former banker was placed on Interpol’s most wanted list and a London court agreed to extradite a hedge-fund trader as German prosecutors ratcheted up efforts to crackdown on suspects in its Cum-Ex tax probe.

Germany placed former investment banker Paul Mora on Interpol’s public list of most-wanted suspects, and Duet Group operations manager Vijaya Sankar lost his attempt to block his extradition in a London court.

Germany, Denmark and Belgium are all trying to extradite former hedge-fund employees as part of probes into the controversial Cum-Ex trades. Germany alone is looking at the actions of as many as 1,000 suspects from across the financial industry.

“Extradition would not be disproportionate taking account of the seriousness of the conduct alleged and the likely penalty in relation to the offences for which extradition is sought,” Judge Timothy Godfrey said while ruling on Sankar’s case.

Sankar was arrested under a European Arrest Warrant at his home in June, and has 7 days to appeal the ruling after losing an earlier challenge of the warrant based on Brexit.

Germany alleges he took part in Cum-Ex trading from late 2009 to July 2010, his lawyer said in a court filing. The 44-year-old, who hasn’t been charged with a crime, faces a maximum sentence 15 years imprisonment, he said. His lawyer declined to comment, as did prosecutors in Cologne.

Mora, who lives in New Zealand, now faces an Interpol Red Notice based on an arrest warrant granted by German judges last month. The 53-year-old told a Wiesbaden court last year that he would skip his tax fraud trial because of New Zealand’s low Covid-19 infection rate and argued that he wouldn’t get a fair hearing in Germany.

Trader Loses Cum-Ex Case as Ex-Banker Placed on Interpol List

“Mora is suspected of having played a decisive role in the development and planning of cum-ex deals,” according to a German Federal Police poster that can be downloaded on its website. “He is presumed to be staying abroad.”

Cum-Ex trades, named for the Latin term for “With-Without,” took advantage of tax laws in various European countries that lead to multiple refunds tax-refund claims on a dividend levy that was paid only once. German lawmakers say the practice cost the government at least 10 billion euros ($12.1 billion) in lost revenue.

Mora is among six people charged by Frankfurt prosecutors in 2017 over the controversial tax trades at UniCredit SpA’s HVB unit. Mora’s attorneys said he’s kept authorities informed of his whereabouts.

“He is not a ‘fugitive’ and these public steps are therefore wholly unnecessary,” his lawyers said in an emailed statement. Mora denies wrongdoing, and “reserves his full rights as a New Zealand citizen to remain in his home country.”

While Germany and New Zealand don’t have an extradition treaty, an Interpol Red Notice would restrict Mora’s ability to travel outside his home country.

“An Interpol listing means that the wanted person basically can’t travel any more,” said Suzan Huettemann, a professor of criminal law at Mannheim University in Germany. “Whenever he enters another country, the search pops up and he faces the risk of being arrested.”

And the lack of a treaty doesn’t mean that extradition is impossible. “It’s just more difficult, as a rule, to get that person extradited,” Huettemann said.

Prosecutors in at least five German cities are looking into the controversial trades and are targeting numerous financial institutions. Cologne is leading the largest probe.

Mora and two co-workers in London set up the trades at the investment-bank unit, according to the charges. The indictment targets those three and two Germans who also worked at HVB. All have left the bank.

Hanno Berger, once Germany’s most profitable tax lawyer, has also been charged in that case. He also faces a second indictment which Cologne prosecutors filed last year. Berger has consistently denied any wrongdoing.

Mora worked for some of the biggest banks in the world during the 2000s, including Credit Suisse Group AG and Merrill Lynch & Co., according to the U.K. Financial Conduct Authority. He joined HVB in 2004, which became a subsidiary of Milan-based UniCredit soon after.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.