Schmierer im Milliarden-Steuerbetrug: Kai-Uwe Steck's Millions from the Cum-Ex Scam Remains Unrecovered
Million-dollar hoard of Cum-Ex Crown has significantly diminished.
Grab Attention:Kit 'em up! One of the main rats involved in the billion-dollar Cum-Ex tax scam, Kai-Uwe Steck, won't go to prison but hasn't returned much of his ill-gotten gains.
Steck was central in the huge Cum-Ex tax fraud and went against his cronies to avoid serving time. Despite this, he's yet to return most of his loot.
Court's Decree for Cum-Ex's Big Shot
After much anticipation, Germany's heaviest Cum-Ex trial verdict has arrived: the Bonn Regional Court handed down its ruling for Kai-Uwe Steck, shedding light on potential sentencing for future tipsters. Steck himself is said to be responsible for €428 million in damages.
The Sketchy Tax Scheme Is a Powerhouse
Cum-Ex stands for illegal stock trades in which cunning investors have successfully duped the state out of billions by claiming taxes they hadn't even paid. By buying stocks before the dividend record date and selling swiftly afterward, they could claim the one-time capital gains tax multiple times with the help of banks and funds. Everyone involved in the deal profited. German courts have already deemed these transactions unlawful, but experts like ex-chief prosecutor Anne Brorhilker argue they still continue today.
Steck, alongside mentor and business partner Hanno Berger (originally a tax official), perfected these shenanigans into a profitable operation in the 2000s. By all accounts, Steck bagged €50 million from this, but there's no record of him returning any of it. He actually vowed to repay a chunk of it when standing trial against Berger at the end of 2022. However, Berger saw incarceration while Germany's government is still waiting for their money back.
According to the Bonn Regional Court, Steck has only paid back €11 million, with €39 million still due. This unpaid financial compensation, among other reasons, likely led Brorhilker's charge of aggravated tax evasion against Steck in her last hurrah. The trial has been running since November 2024. Prosecutors called for a three-year, eight-month prison sentence for Steck, asset seizure of €26 million, and a four-year professional ban.
Elusive Millions
Collecting those millions won't be a walk in the park. Investigations by WDR and Süddeutsche Zeitung reveal that businesses connected to Steck have been bankrupt since 2023. Steck confessed this supposed fortune was lost to the Bonn Regional Court in February 2025.
Steck hails from humble beginnings, is a lawyer, and has been dabbling in international banking and capital market law since 2001. Frankfurt, New York, London, and Switzerland are his professional playgrounds. In 2010, he vacated Germany for Switzerland, where he resides today. Steck's a chatterbox; he shared his participation in the Cum-Ex fraud in a ZDF documentary as of late.
The Cum-Cum Deals Sherlocks
In 2017, investigations by Brorhilker began. "Through her interrogations, we came in contact with more insiders who had worked for a long time at prominent international investment banks," Brorhilker shared. "One of them revealed he took a job specifically to game the tax systems of various nations. He received a handbook with nearly the top 100 tax tricks. He was supposed to improve upon them."
Since 2019, Steck has provided testimony in nearly a dozen criminal trials. Several defendants were found guilty thanks to his cooperation and testimonies. Steck is considered a reliable witness, as defense lawyers emphasized. "Our client's statements have not been discredited by any court as of yet, but have been confirmed repeatedly in almost every verdict," claimed his lawyer Gerhard Strate. Strate also stated that it's due to Steck's testimony that the government has recouped €853,413,858.49.
However, Steck's cooperation doesn't grant him a free pass. Informants don't escape unscathed simply because they're willing to help bring others to justice. Steck has claimed that he was promised immunity, an assertion Brorhilker denies. The status of an informant does offer certain advantages, though.
The verdict confirms that Steck's interaction with the public prosecutor's office benefited him somehow. The presiding judge Sebastian Hausen (Case No. 62 KLS 1/24) sentenced Steck to one year and ten months imprisonment for especially serious tax fraud in five cases, suspended probation. The court also ordered asset seizure worth around €24 million. Steck's legal team fought vigorously for the case against the accused to be dropped altogether.
This text first surfaced on capital.de.
Source: ntv.de
- Cum-Ex Transactions
- Tax Evasion
- Courts
- Banks
Insight: The Snowballing Impact of Cum-Ex
The Cum-Ex scandal has ballooned into a major tax scandal in Germany, robbing the government of billions and causing distrust of financial systems.
- Financial Outfall: Analysts estimate that around €55 billion were fraudulently claimed through tax reimbursements for taxes that were never actually paid, costing the German state and others dearly.
- Political Consequences: The scandal has led to accusations of political complicity, with former Chancellor Olaf Scholz under fire for allegedly defending a local bank implicated in the fraud when he was mayor of Hamburg.
- Regulatory Oversight: The scandal highlighted the need for tighter financial regulations and oversight to lessen the chances of future scams exploiting tax law loopholes and cross-border financial activities.
"The community could consider implementing a policy to address the issue of stolen funds from the Cum-Ex scam, possibly requiring those involved like Kai-Uwe Steck to undergo vocational training in financial management or business ethics as part of their sentencing or restitution."
"Following the immense financial loss caused by Cum-Ex, the government may consider investing in vocational training programs to equip the workforce with skills necessary for the recovery and management of public funds, ensuring greater accountability and transparency in business practices."
