Kai-Uwe Steck, a pivotal figure in one of the most extensive tax fraud schemes in Germany’s history, has been sentenced for his involvement in the scandal that unfolded until 2012. The Bonn Regional Court found Steck guilty and imposed a suspended sentence of one year and ten months, a significantly lighter punishment than the three years and eight months sought by the prosecution.
As part of the court’s ruling, the former tax lawyer was also mandated to repay €24 million, of which €11 million has already been returned. Steck’s central role in this fraudulent operation, which resulted in over €428 million in losses to the German tax authorities, was underscored by the presiding judge.
Details of the Fraud Scheme
Steck, now 53, served as a tax lawyer alongside Hanno Berger, the so-called “mastermind” behind the infamous “Cum-Ex” scandal. Both were accused of orchestrating intricate share transactions that enabled various parties to illegitimately claim tax refunds on dividend payments. Despite the serious nature of his actions between 2007 and 2011, Steck’s cooperation with law enforcement and his subsequent role as a whistleblower contributed to his reduced sentence.
Impact of the Cum-Ex Scandal
In contrast, Berger received a harsh sentence of eight years in prison in 2022. The “Cum-Ex” case, recognized as the largest tax fraud scandal in German history, has led to a wave of legal actions and has implicated several high-profile politicians, including former Chancellor Olaf Scholz. Scholz faced allegations of shielding a local bank from scrutiny during his tenure as mayor of Hamburg, but he has consistently denied any misconduct. Prosecutors ultimately dropped the case against him due to a lack of evidence.
To date, German officials have managed to recover approximately €3.4 billion through various legal proceedings. Nevertheless, it is estimated that tens of billions of euros are still unaccounted for, with ongoing investigations aimed at recovering the remaining lost funds.
“As a ‘central figure’ in the fraud scheme Steck contributed to losses of more than €428 million to the German tax authorities.”