I blew the whistle on an enormous tax fraud

[ad_1] Theo Leggett Enterprise Correspondent

<img sizes="(min-width: 1280px) 50vw, (min-width: 1008px) 66vw, 96vw" srcset="https://ichef.bbci.co.uk/news/240/cpsprodpb/de0f/live/2aef0270-9f8c-11f0-b741-177e3e2c2fc7.jpg.webp 240w,https://ichef.bbci.co.uk/news/320/cpsprodpb/de0f/live/2aef0270-9f8c-11f0-b741-177e3e2c2fc7.jpg.webp 320w,https://ichef.bbci.co.uk/news/480/cpsprodpb/de0f/live/2aef0270-9f8c-11f0-b741-177e3e2c2fc7.jpg.webp 480w,https://ichef.bbci.co.uk/news/640/cpsprodpb/de0f/live/2aef0270-9f8c-11f0-b741-177e3e2c2fc7.jpg.webp 640w,https://ichef.bbci.co.uk/news/800/cpsprodpb/de0f/live/2aef0270-9f8c-11f0-b741-177e3e2c2fc7.jpg.webp 800w,https://ichef.bbci.co.uk/news/1024/cpsprodpb/de0f/live/2aef0270-9f8c-11f0-b741-177e3e2c2fc7.jpg.webp 1024w,https://ichef.bbci.co.uk/news/1536/cpsprodpb/de0f/live/2aef0270-9f8c-11f0-b741-177e3e2c2fc7.jpg.webp 1536w" src="https://ichef.bbci.co.uk/news/480/cpsprodpb/de0f/live/2aef0270-9f8c-11f0-b741-177e3e2c2fc7.jpg.webp" loading="eager" alt="Jas Bains A man who appears to be in his 30s - he is sitting on a sofa at home, wearing a light off-white t-shirt, and smiling, clearly relaxed in the setting - he is leaning on the arm of the sofa with his left arm, and his watch is visible " class="sc-5340b511-0 hLdNfA"/> Jas Bains Jas Bains alerted Danish authorities to a £1bn tax rip-off and so they hit him with a lawsuit

"We would be met at airports in 20-foot limousines, and brought to locations just like the Atlantis lodge in Dubai or the Singapore Grand Prix. There'd be 100 grand spent within the bar."

In 2013, Jas Bains was an formidable younger lawyer, having fun with the excessive life that got here with working for an especially worthwhile Metropolis hedge fund.

Right this moment, he's jobless and has misplaced most of his wealth, having spent years preventing authorized battles and making an attempt to clear his identify of affiliation with an enormous tax rip-off.

The irony, he says, is that he blew the whistle on the rip-off within the first place – solely to search out himself one of many targets of a £1.4bn lawsuit.

He's reflecting one month after the case ended, bringing to an in depth eight years of authorized arguments and one of many highest worth civil instances ever heard within the UK.

The Danish tax authority was left licking its wounds, after failing to determine that a big group of defendants, together with Mr Bains, had been chargeable for enormous losses it had suffered.

All of it started in 2009, when a banker named Sanjay Shah established a London-based hedge fund referred to as Solo Capital. It additionally had places of work in Dubai. It was certainly one of a community of funds, banks and authorized outfits that had been to grow to be closely implicated within the so-called cum-ex commerce.

This targeted on transactions the place shares had been offered from one investor to a different instantly earlier than the cost of a dividend (cum, or with, dividend) however delivered afterwards (ex-dividend).

These concerned exploited delays in processing the sale to create confusion over who really owned the shares in the meanwhile when the dividend was paid. This tactic allowed each events to say rebates on withholding tax - a levy which had solely been paid as soon as, when the dividend was issued.

From the surface, it was difficult, however for these concerned it led to ever larger and extra elaborate trades which finally value taxpayers throughout Europe billions.

It initially turned widespread in Germany, earlier than spreading to different international locations together with France, Belgium, Italy and Austria. Solo Capital focused Denmark, with the majority of its cum-ex trades happening from 2013 onwards.

Jas Bains joined the corporate in 2010, as its head lawyer, however went on to run the London workplace. On the time, Solo was "a profitable agency, being profitable in 5 - 6 completely different areas fairly effectively".

<img sizes="(min-width: 1280px) 50vw, (min-width: 1008px) 66vw, 96vw" srcset="https://ichef.bbci.co.uk/news/240/cpsprodpb/0e4c/live/67b19be0-9f92-11f0-b9ae-cbef91e6ae73.jpg.webp 240w,https://ichef.bbci.co.uk/news/320/cpsprodpb/0e4c/live/67b19be0-9f92-11f0-b9ae-cbef91e6ae73.jpg.webp 320w,https://ichef.bbci.co.uk/news/480/cpsprodpb/0e4c/live/67b19be0-9f92-11f0-b9ae-cbef91e6ae73.jpg.webp 480w,https://ichef.bbci.co.uk/news/640/cpsprodpb/0e4c/live/67b19be0-9f92-11f0-b9ae-cbef91e6ae73.jpg.webp 640w,https://ichef.bbci.co.uk/news/800/cpsprodpb/0e4c/live/67b19be0-9f92-11f0-b9ae-cbef91e6ae73.jpg.webp 800w,https://ichef.bbci.co.uk/news/1024/cpsprodpb/0e4c/live/67b19be0-9f92-11f0-b9ae-cbef91e6ae73.jpg.webp 1024w,https://ichef.bbci.co.uk/news/1536/cpsprodpb/0e4c/live/67b19be0-9f92-11f0-b9ae-cbef91e6ae73.jpg.webp 1536w" src="https://ichef.bbci.co.uk/news/480/cpsprodpb/0e4c/live/67b19be0-9f92-11f0-b9ae-cbef91e6ae73.jpg.webp" loading="lazy" alt="Getty Images Sanjay Shah standing outside underneath trees in what appears to be a garden in a built up office area - he is a middle aged man, with a white shirt and thinning hair. He is looking just past the camera with a neutral expression. " class="sc-5340b511-0 hLdNfA"/> Getty Pictures Sanjay Shah was imprisoned in Denmark in a separate felony trial final yr

And being profitable meant having fun with the excessive life, with workers happening sprees to locations like Las Vegas, Singapore and Dubai.

"What I'll say about Sanjay is he knew the best way to throw a celebration," he says.

"One time we had been within the Ku De Ta membership on the Marina Bay Sands Lodge in Singapore. He purchased 20 bottles of classic Dom Perignon champagne, and other people had been simply spraying one another with the stuff.

"Folks have likened it to Wolf of Wall Avenue and such like."

It did not finish there. "Sanjay organised personal concert events in Dubai with Prince. A small room with him and his buddies at three or 4 million {dollars} for a night ... personal concert events with Snoop Dogg."

By mid-2014, nevertheless, Mr Bains had fallen out together with his boss and left the corporate for a competitor. On the time, the cum-ex transactions concentrating on Denmark had been dramatically choosing up.

"I used to be listening to from individuals who'd left Solo that Sanjay was doing a little huge trades in 2014, however look, I might moved on, it did not have a lot to do with me," he says.

"However then I heard, really Sanjay made near €100m in trades from Denmark in 2013, nearer to €250m in 2014 and he was in search of a billion in 2015."

Alarm bells had been ringing.

<img sizes="(min-width: 1280px) 50vw, (min-width: 1008px) 66vw, 96vw" srcset="https://ichef.bbci.co.uk/news/240/cpsprodpb/080a/live/c1ee90f0-b594-11f0-a6fc-b50bf0239b95.jpg.webp 240w,https://ichef.bbci.co.uk/news/320/cpsprodpb/080a/live/c1ee90f0-b594-11f0-a6fc-b50bf0239b95.jpg.webp 320w,https://ichef.bbci.co.uk/news/480/cpsprodpb/080a/live/c1ee90f0-b594-11f0-a6fc-b50bf0239b95.jpg.webp 480w,https://ichef.bbci.co.uk/news/640/cpsprodpb/080a/live/c1ee90f0-b594-11f0-a6fc-b50bf0239b95.jpg.webp 640w,https://ichef.bbci.co.uk/news/800/cpsprodpb/080a/live/c1ee90f0-b594-11f0-a6fc-b50bf0239b95.jpg.webp 800w,https://ichef.bbci.co.uk/news/1024/cpsprodpb/080a/live/c1ee90f0-b594-11f0-a6fc-b50bf0239b95.jpg.webp 1024w,https://ichef.bbci.co.uk/news/1536/cpsprodpb/080a/live/c1ee90f0-b594-11f0-a6fc-b50bf0239b95.jpg.webp 1536w" src="https://ichef.bbci.co.uk/news/480/cpsprodpb/080a/live/c1ee90f0-b594-11f0-a6fc-b50bf0239b95.jpg.webp" loading="lazy" alt="Jas Bains Jas Bains in a smart suit in a swanky bar restaurant talking to people who are out of shot" class="sc-5340b511-0 hLdNfA"/> Jas Bains On the top of his profession Jas Bains loved residing the excessive life in Las Vegas, Singapore and Dubai.

"I assumed this cannot be proper. It is not that I assumed the trades had been invalid or felony not directly. It is simply any nation that has a billion Euros syphoned off it would scream bloody homicide."

Solo Capital wasn't the one firm now concentrating on Denmark. Others had been getting in on the act. Jas believed it was solely a matter of time earlier than the home of playing cards got here tumbling down.

"I used to be fairly assured I might performed nothing flawed, however I knew if this carried on and blew up in spectacular fashion, I used to be going to get pulled in," he explains.

With that in thoughts, in 2015, he determined to blow the whistle.

He contacted a Danish lawyer, who in flip put him in contact with the Danish police. He went on to spend two and a half years helping them with understanding how the cum-ex rip-off labored.

Danish prosecutors didn't goal Mr Bains. Their consideration was targeted firmly on Mr Shah. The 54-year-old was finally extradited from Dubai to face fraud expenses – and in December final yr was sentenced to 12 years in jail.

It was the heaviest penalty ever handed out in Denmark for a fraud case. He's presently interesting.

'Unattainable to get a job'

However when the Danish tax authority, Skatteforvaltningen (Skat), launched its enormous case, looking for to recuperate its misplaced cash, Mr Bains was one of many greater than 100 particular person and company defendants initially focused - alongside Mr Shah.

With that lawsuit hanging over him it turned out of the query for him to work as a lawyer, or to get a job within the Metropolis of London.

"It is inconceivable to get a job if you happen to're being sued as a part of a two billion greenback worldwide tax fraud case," he says.

Nonetheless, in October, Excessive courtroom choose Mr Justice Andrew Baker threw out Skat's claims.

Acknowledging that "greed is usually a highly effective motive, and I think about there was substantial greed right here", he nonetheless concluded that Skat has did not show it was a sufferer of deception.

The authority's "controls for assessing and paying dividend tax refund claims had been so flimsy as to be non-existent," he stated.

That appeared to echo an announcement beforehand made by Mr Shah in a 2021 German TV interview, which was additionally cited within the ruling:

"Why would they pay out for years and years after which, after 4 years of funds they are saying, 'Oh, we made a mistake, or we had been cheated'", he stated.