Verschleierte Vermögensverwaltungsverträge

Veiled wealth management contracts.

270 tax police searched about 40 Commerzbank branches at their Frankfurt headquarters and elsewhere on 03 Dec 2013 seeking information about Italian partners who had advised the bank’s customers on how to avoid taxes using what only looked like tax-exempted life insurance, according to Bochum prosecutors who executed the razzia with Düsseldorf tax officials.

ZDF heute journal’s finance correspondent Valerie Haller said assets such as stock or bonds in “depots” at the bank that should have been subject to capital gains tax were instead “wrapped in fake life insurance” by the friendly insurer. The long (12-year) period of the fake life insurance instruments conveniently allowed some tax evasion statutes of limitations to expire. Unlike real life insurance, these instruments let customers continue investing the money wherever they chose while avoiding significant tax and remaining rather anonymous. Real life insurance that qualifies for German tax breaks must also insure against a risk (the death of the insuree), according to a German law passed in 2009 to tighten up these loopholes. After the 2009 law, said a 2012 S.Z. article, such life insurances bought by Germans had to be reported immediately to the Bundesfinanzministerium [Federal Finance Ministry] when bought in Germany, but when bought outside the country the sellers were only obligated to report them to the German government when the policies were paid out.

The Italians are rumored to have been working for an Italian insurance company called Generali, though that has not been confirmed. Handelsblatt.com heard it was Generali subsidiary PanEurope Ltd., headquartered in Ireland, and added that the scheme had a minimum deposit requirement of half a million euros but prosecutors thought this one had been used to avoid taxation on several hundred million. Reporting on a similar investigation in 2012 of German insurance customers at the Swiss bank Crédit Suisse, Süddeutsche.de said English names for the scheme included “insurance wrappers” and “private placement insurance.”

Commerzbank is only being called as a witness, the bank’s representatives said. They only managed das Depot, which translates as portfolio but has always sounded more like an armored box.

The Green party took advantage of the event to call once more for a German criminal code for companies, in addition to individual people, so that companies can be prosecuted for crimes.

(Fair SHLY ah teh   fair MƏG oongs fair VAULT oongs fair TRAY geh.)

Beibehaltung

Retention.

April 2013: After it became known the chair of the supervisory board [Aufsichtsrat] of Germany’s richest and most successful soccer team, Bayern Munich, was under investigation for voluntarily reporting himself [Selbstanzeige] as having an insufficiently reported and taxed ~500 million euros in a Swiss bank account, there seem to remain some loose ends in his origin story for where the half billion came from*. Yet on 06 May 2013 Bayern Munich’s supervisory board voted not to accept Uli Hoeneß’s resignation as its head. Members of the supervisory board who supported Mr. Hoeneß at this meeting included: Herbert Hainer, C.E.O. of Adidas. Rupert Stadler, C.E.O. of Audi. Timotheus Höttges, chief of Finances and Controlling at top Bayern sponsor Deutsche Telekom. Martin Winterkorn, C.E.O. of Volkswagen. Edmund Stoiber (C.S.U.), former candidate for German chancellor in the C.D.U./C.S.U. party.

10 May 2013: Mr. Hoeneß is suing the responsible prosecutor’s office for being the source of the press’s discovery of the investigation into the mysterious half billion euros, in April 2013.

30 Jul 2013: Uli Hoeneß has been charged with alleged tax evasion. The Economic Crimes Chamber [Wirtschaftsstrafkammer] of the second Munich Landgericht [Münchener Landgericht II] must now decide whether it will allow the trial to proceed and whether to open the main trial. The decision is expected in late September 2013.

04 Aug 2013: The president of the German Soccer Association [Deutscher Fussballbund e.V., D.F.B.], Wolfgang Niersbach, declared his support for Uli Hoeneß.

07 Aug 2013: Stern.de report that an anonymous informant told the second state prosecutors office in Munich [Münchener Staatsanwaltschaft II] that Mr. Hoeneß’s untaxed millions are not limited to one account at the Swiss Vontobel bank (said by prosecutors to have contained 500 million Swiss francs but said by Mr. Hoeneß in April 2013 never to have exceeded around 15 to 20 million euros, tops). Stern.de reported the informant said Mr. Hoeneß’s Vontobel account had balances consistently [“durchgehend“] exceeding 500 million Swiss francs in years before 2008 and also supplied information about stock dealings and transactions involving numbered accounts at three other Swiss banks: Crédit Suisse, Julius Bär and the Zürcher Kantonalbank.

The whistleblower said Deutsche Telekom stock with which Mr. Hoeneß participated in so-called dividend stripping was also involved.

04 Nov 2013: Mr. Hoeneß will have to “answer before a court” after all, starting ~10 Mar 2014. Landgericht Munich II’s “Economic Chamber” [Wirtschaftskammer] announced it will allow trial of charges against him of tax evasion and providing inaccurate answers. His Selbstanzeige earlier this year “contained errors.”

Frank Bräutigam, ARD tagesschau.de’s excellent legal correspondent, said the trial will evaluate the correctness of the Selbstanzeige (timeliness, completeness and accuracy). If the court determines that the Selbstanzeige was not properly executed, next it must decide how much money was improperly handled and what penalties could be imposed.

The Bayern Munich football club’s supervisory board reconfirmed that they want to retain Mr. Hoeneß as president of the club.

14 Mar 2014: Uli Hoeneß’s trial for 3.5 million euros of tax evasion was this week. In the two weeks before the trial started on Monday, he apparently gave prosecutors 50,000, some said 70,000, pages of Vontobel bank account statements previously withheld. On Monday he surprised reporters by announcing he’d actually not paid 18 million euros tax, but this was the ultimate number, no more revelations. On Tuesday, an auditor testified that the amount was actually 27 million. He was found guilty of 28.5 million euros in tax evasion and sentenced to 3.5 years, which will probably be in an open prison. On Friday, he said he would not appeal. The prosecutors may still decide to appeal. Uli Hoeneß resigned as president of the FC Bayern Munich soccer club and chair of FC Bayern Munich Inc.’s supervisory board.

Mr. Hoeneß’s salary tended to be about 10 million euros per year. The Vontobel account never had more than 150 million euros in it at one time.

(BY beh HALT oong.)

* Mr. Hoeneß said he netted 500 million euros between 2000 and 2012 by compulsively playing the stock market starting with a 10-million-euro combination gift/loan in 2000 from a now-deceased friend, a former C.E.O. of Adidas.

Unternehmensstrafrecht

“Corporate penal code.” Green party member Jürgen Trittin has called for Germany to create laws punishing companies rather than their individual employees who can be shown to have broken the law. Trittin said the USA has such a code and therefore the Deutsche Bank, Germany’s largest bank, will be punished more in the USA than it will in Germany. His is not the first voice or political party to call for a German penal code for companies. Meanwhile, in the USA, people are furious about the slap on the wrist HSBC received in a settlement, not a prosecution, for alleged terror financing and drug money laundering so severe the boxes of cash were too large to fit through tellers’ windows, with ~50,000 accounts alone at one Cayman Islands branch that executed “virtually no oversight.”

An 11 Dec 2012 Spiegel op-ed noted that three major British banks have been required to pay large fines in the USA this year: Barclays, Standard Chartered and now HSBC. “All three of these large banks are based in London. That is no coincidence. Although in the past few years the American justiciary has taken aim at institutions from other countries, such as Credit Suisse, ING and JP Morgan, the British banks play a special role. They are traditionally set up more globally than their competition and have had business ties, sometimes for decades, in countries that are classified as ‘rogue states’ today.” Spiegel’s Carsten Volkery added that HSBC’s stock price has gone up by 14% since the summer, and Standard Chartered’s by 20%.

(OON ter NAY men’s SHTROFF rect.)

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