Saturday, February 24, 2024

British trader Sanjay Shah extradited to Denmark on fraud charges

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A British hedge fund trader accused of defrauding Danish taxpayers of $1.3 billion has been extradited by the United Arab Emirates to Denmark, where he has lived for more than a decade.

Trader Sanjay Shah was taken into police custody on Wednesday morning after arriving in Copenhagen and is scheduled to appear in court on Thursday for a bail hearing.

Danish authorities have been pursuing Shah since 2012, when they learned that he and his colleagues at Solo Capital in London had discovered a way to siphon money from the country’s version of the Inland Revenue. The technique involved a complex and carefully planned transaction in which tax was refunded on stock dividends. Mr. Shah has long maintained his innocence.

These so-called pay-as-you-go transactions were used by other traders to drain wealth from other countries, in what one scholar called “the greatest tax theft in European history.” The continuing reckoning of arrests and trials on the continent reveals the toll. Germany lost about $30 billion, France about $17 billion, and smaller amounts were collected from countries including Poland, Norway, Austria and Italy.

These countries did little to warn other countries about their foreign trade. Denmark was one of the last countries to suffer, having spent years trying to deceive and negotiate with the United Arab Emirates (UAE) to extradite Shah.

“This dividend case is an important case for Denmark, and one of the largest and most serious criminal fraud cases,” said Peter Hummelgaard, the country’s justice minister. “At stake are our public funds, our welfare state and our trust-based society.”

Mr Shah said he had simply taken advantage of a loophole that his lawyer had advised him was perfectly legal. His spokesman, Jack Irvine, said Mr. Shah did not admit guilt and offered to settle the matter several years ago, but that offer was quickly rejected.

“Mr. Shah appears to have been convicted by the Danish government, judicial authorities and media prior to trial,” Irvine said in a statement. “You have to ask, will he get a fair trial?”

Shah moved to Dubai in 2009 and says he has fallen in love with the city. He lived at one point in a 10,000-square-foot villa with beach access and a $1.3 million yacht.

Irvine said that as Danish prosecutors painted him as a national villain, authorities in the UK, United Arab Emirates and Germany began freezing his assets and eventually forced him to put his home up for sale. It is said that For years he did not travel for fear of being arrested.

Following pressure from Danish investigators, Shah was arrested in the UAE in May 2022. It took months for countries to sign an extradition agreement so that Shah could be sent to Denmark to stand trial.

This incident will be one of many in the ongoing aftermath of dropouts. Danish authorities have filed a lawsuit in London against dozens of financial institutions, seeking to recover about $1.7 billion in lost tax revenue.

And in Germany, more than 1,000 lawyers and financiers are under investigation, and several have already been convicted and fined on similar charges. In May, Hanno Berger, a former tax inspector who is believed to be the mastermind behind the trade in Germany, was sentenced to eight years in prison. He had been extradited from Sweden, where he had lived since 2012.



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