It May Be the Biggest Tax Heist Ever. and Europe Wants Justice
It May Be the Biggest Tax Heist Ever. And Europe Wants Justice.
You have a preview view of this article while we are checking your access. When we have confirmed access, the full article content will load.Credit...Illustration by Nicolas OrtegaStock traders are accused of siphoning $60 billion from state coffers, in a scheme that one called “the devil’s machine.” Germany is the first country to try to get its money back.Credit...Illustration by Nicolas OrtegaPublished Jan. 23, 2020Updated Jan. 24, 2020They made quite a team.One was an Oxford-educated wunderkind who handled the complicated math behind the transactions. The other was a beefy, 6-foot-2 New Zealander with an apparent fondness for Hawaiian shirts, who brought in clients and money.Martin Shields and Paul Mora met in 2004, at the London office of Merrill Lynch. Mr. Shields was always the pupil, a little in awe of the older man’s ability to bluff and charm. Once, after Mr. Mora fended off suspicious auditors at a bank where the two worked, Mr. Shields sent an admiring email.“Remind me never to play poker with you,” he said, according to an internal report later commissioned by the bank.Today, the men stand accused of participating in what Le Monde has called “the robbery of the century,” and what one academic declared “the biggest tax theft in the history of Europe.” From 2006 to 2011, these two and hundreds of bankers, lawyers and investors made off with a staggering $60 billion, all of it siphoned from the state coffers of European countries.As one participant would later put it, taxpayer funds were an irresistible mark for a simple reason: They never ran out.The scheme was built around “cum-ex trading” (from the Latin for “with-without”): a monetary maneuver to avoid double taxation of investment profits that plays out like high finance’s answer to a David Copperfield stage illusion. Through careful timing, and the coordination of a dozen different transactions, cum-ex trades produced two refunds for dividend tax paid on one basket of stocks.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe.AdvertisementSKIP ADVERTISEMENT