Ex-Banker to Skip Trial on Charges in German Tax Scam

(Bloomberg) -- Former investment banker Paul Mora won't show up at a German trial where he is charged with tax evasion related to the Cum-Ex scandal.

Mora, a New Zealander, told a court in Wiesbaden that he won't travel to Europe for the case, which is scheduled to start Oct. 20, tribunal spokesman Wolfram Simon said. If Mora doesn't appear, the court could issue an arrest warrant, Simon said.

The move adds to the woes facing the six-person trial. Another defendant, Hanno Berger, has told the court he's ill and isn't able to stand trial. The prosecution may also be jeopardized by the rising number of Covid 19 infections.

“So far, we think the trial will start as planned,” Simon said. “There's no other decision yet.”

Mora's attorney Franz Salditt confirmed the filing and said for the moment he can't comment further.

The trial would be the second in the nation over the trading strategy that's triggered multiple probes by German prosecutors. The first case in Bonn saw the conviction of two bankers who are also defendants in the Wiesbaden case.

Cum-Ex trades exploited the German revenue-collection system to receive multiple refunds on taxes paid on dividends.

Read more: Why ‘Cum-Ex' Tax Dodge Casts Shadow on Global Banks: QuickTake

The strategy required the participation of many entities, including banks, brokers and lawyers. Named for the Latin term for “With-Without,” the practice ended in 2012 when Germany revised its rules. The trades may have cost taxpayers more than 10 billion euros ($11.7 billion).

Among the defendants in Wiesbaden is Martin Shields, a former investment banker who lives in Dublin. German health authorities have declared the city a risk area, meaning any person who travels to Germany from the Irish capital needs to quarantine for 14 days unless the visitor tests negative.

Another of the accused is Nicholas Diable, who was also convicted in the Bonn trial. He lives in Gibraltar, which Germany has also declared as a risk zone for Covid 19 and is thus facing similar travel challenges.

The pandemic brought the administration of justice to a near standstill globally in the early part of the year. By now, court have resume proceedings. But the rising number of infections may lead to more delays in the month ahead.

The Wiesbaden court is building a special hall on a local fairground to host the trial under the rules of social distancing. The work hasn't been completed but will be by the trial's opening day, according to Simon, the court spokesman.

(A previous version of this story was correct to fix the location of the trial in the first paragraph.)

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