Posted by A British hedge fund trader accused of defrauding Danish tax authorities in a billion-pound scam has gone on trial in Copenhagen, with the government hoping to recover the money in the blockbuster case.
Sanjay Shah, who was arrested in June 2022 in Dubai where he was living, is accused of running a 9bn krone (£1.03bn) scam that enabled companies he controlled to fraudulently claim Danish tax refunds between 2012 and 2015.
The 53-year-old pleaded not guilty on Monday and said he had not violated Danish law. Shah could face up to 12 years in prison if the Glostrup district court in Copenhagen finds him guilty.
The United Arab Emirates extradited Shah to Denmark in December after lengthy negotiations, having signed an extradition treaty with Denmark in March 2022.
The prosecution claims Shah “used a well-designed and organised fraud scheme to submit more than 3,000 applications to unlawfully receive more than 9bn krone in dividend tax refunds from the treasury”.
In practice, according to the prosecution’s case, foreign firms controlled by Shah pretended to own shares in Danish companies and fraudulently claimed dividend tax refunds.
The prosecution said it hoped to recover 7.2bn krone illegally acquired by Shah.
Describing the complexity of the case, the prosecutor Marie Tullin told the court it involved more than 300,000 documents. “It’s not a secret to anyone that there are a lot of attachments,” she said.
Danish media have portrayed Shah as a man who flaunted his flashy lifestyle while also raising money through charity concerts for an organisation he founded called Autism Rocks.
Shah’s former assistant Anthony Mark Patterson recently decided to plead guilty to being an accomplice. On 1 March the Briton was sentenced to eight years in prison. The court may call him as a witness in Shah’s case.
During his trial, Patterson said he was “thrown into deep water” as soon as he was recruited to Solo Capital, the investment fund that Shah founded in 2013 and headed.
“By the autumn, when I fully understood the internal work processes, I became aware of the trading patterns when we had to plan the trades for 2014,” Patterson told the court. He expressed his “regret at having taken part” in the scheme.
Shah’s lawyer Kåre Pihlmann told AFP his client was concerned about getting a fair trial in Denmark.
“Denmark has very, very good judges. Independent, professional. That’s not the problem,” Pihlmann said. “The problem is that some government representatives, in particular cabinet ministers, have over the years made comments about the case giving the impression that he is guilty of fraud. That is a possible violation of the presumption of innocence.”
In January 2021 when the indictment was announced, the prosecution said it had managed to seize 3bn krone, or about a third of the total.
“Generally … it is very difficult or almost impossible to get the money back. And as a rule, all seized assets must be shared with the country which carried out the actual seizure,” Per Fiig, another prosecutor, said in a statement at the time.
In May 2023 a Dubai court ordered Shah to pay Denmark’s tax authority more than $1.2bn, and another trial is under way in Britain.
So-called “cum-ex” and “cum-cum” scams, which take advantage of a loophole in European tax laws, have been uncovered in several EU countries. According to Bloomberg estimates, the scams have cost European taxpayers up to €150bn (£128bn).