"There was this culture in London, and it really came from New York," he said. “These boys were from New York or trained in London on the banks of New York, and they saw Europe as their playground. People at the highest levels were collaborating to scam countries. "
Apparently risk-free profits appeared, and over the years a mini industry prospered, one that a former participant labeled "the devil's machine."
Exactly how that machine worked is a central issue in the first cum-ex prosecution, which began in September in Bonn, Germany. In a trial that is expected to last until February, German prosecutors intend to give an example of Mr. Shields, 41, and a former colleague. (Mr. Mora, 52, was charged in December and will be tried separately in the coming months). The men in Bonn's case have been accused of "aggravated tax evasion" that cost the German treasury about $ 500 million.
Last month, the presiding judge issued a preliminary ruling that, for the first time, declared cum-ex a serious crime, calling it "collective outburst in the treasury." The punishment has not yet been determined, but the return and phases of going to prison from this calamity are about to begin.
German prosecutors say they will now pursue another 400 suspects, unearthed in 56 investigations. Large and small banks will be ordered to deliver cum-ex earnings, which could have serious consequences for some. Two have already been ruined.
Dozens of law firms and lawyers may also face penalties, as they have drafted high-priced opinions that claim there was no law that explicitly prohibits cum-ex and, therefore, was perfectly legal. That is an argument that many involved could offer in the next years of litigation. They may insist that if Germany did not make trade impossible, they would not violate a law. Hanno Berger, once the most formidable tax auditor in Germany, already offered a variant of that defense, which later changed sides and became a former ex-genius genius, as well as an ally of Mr. Shields and Mr. Mora .
But German officials say the trade was a form of theft, one so obviously illegal to ban it, that it was tried twice, with laws drafted inefficiently, was hardly necessary. In September, the state justice minister of North Rhine-Westphalia, Peter Biesenbach, came to compare former players with gangsters.