FRANKFURT Feb 15 Deutsche Bank
employees alleged to have evaded tax when buying and selling
carbon emission certificates had concerns over whether their
trading activity was legal but carried on anyway to maximize
profits, a Frankfurt court heard on Monday.
A Frankfurt prosecutor said on the first day of the trial
that between August 2009 and March-April 2010 seven current or
former Deutsche Bank employees deliberately ignored red flags
and withheld information from their managers, despite knowing
about the tax evasion practices of six external carbon traders
making similar trades.
The seven defendants have not yet entered a plea, as is
usual in trials in Germany, although lawyers for six of them say
they will react to the allegations on Thursday, which is the
next day of proceedings.
“Why do we do this? Because we are so greedy,” the
prosecutor quoted one of the defendants as saying.
The case stems from an investigation into so-called carousel
trades in the European Union’s carbon market in 2009 and 2010,
in which some buyers imported emissions permits in one EU
country without paying value-added tax (VAT). The buyers then
sold them to each other, adding VAT to the price and generating
tax refunds when no tax had been paid.
Deutsche Bank’s Frankfurt headquarters were raided by around
500 police and tax inspectors in late 2012 as part of the
In all, Frankfurt prosecutors have investigated more than
two dozen current or former employees at Germany’s largest bank.
Deutsche Bank, which did not comment on Monday’s court
proceedings, has said it had stopped trading carbon dioxide
rights in 2010, suspended those alleged to have evaded tax,
repaid what was owed and cooperated with investigations.
At least 14 people have already been jailed in three
countries for their involvement in VAT fraud,
which European police agency Europol has estimated has cost
taxpayers more than 5 billion euros ($5.6 billion) since 2008.
Only two of the seven people charged are still on Deutsche
Bank’s payroll. They have been suspended from their duties.
During the course of the investigation, Deutsche Bank repaid
220 million euros for VAT refunds which were found during later
court proceedings to have been falsely claimed.
At the start of the trial on Monday, the defendants’ lawyers
tried to have the leading judge Martin Bach replaced, arguing
that he had presided over the case of the external carbon
traders who worked together with Deutsche Bank.
($1 = 0.8978 euros)
(Reporting by Alexander Hübner; Writing by Arno Schuetze;
Editing by Alexander Smith)