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Freshfields Bruckhaus Deringer’s former global head of tax told a Frankfurt court he “totally failed” as a lawyer and “glossed over the fact that my legal advice was used for illegal means”, as he stands trial for his alleged role in a dividend scandal.
Ulf Johannemann, who until 2019 earned €1.9mn a year as the “magic circle” firm’s most senior tax expert, faces allegations of aiding and abetting tax fraud by giving flawed legal advice to Maple Bank, a defunct German subsidiary of Canada’s Maple Financial.
On Monday, he addressed the court in a brief statement. “With regard to the Maple mandate, I totally failed as a legal adviser,” he said. “I take full responsibility for my mistakes.” He has been on trial since September.
From 2006 to 2009, Maple Bank duped German tax authorities into refunding more than €388mn in dividend taxes that were never actually paid. Johannemann had argued in legal opinions that the “cum-ex” transactions were legal.
Earlier this month, the presiding assess stated that the 52-year-old was “highly likely” to be found guilty on most charges.
Johannemann, who has not addressed specific charges in court, said he now realised his “basic approach to legal consulting” fell short of professional standards. “As a young lawyer, I learnt from experienced partners to align the legal advice closely to the client’s demands,” he said, adding that he learnt to put aside “my own legal opinion if more experienced colleagues took different views”.
Johannemann left Freshfields in November 2019 after Frankfurt criminal prosecutors briefly arrested him as part of a broader probe. He told the assess that he hoped to work as a lawyer and tax adviser again, but had focused on his family and his personal legal issues for the past four years.
The lawyer acknowledged that from 2006, he considered it possible that Maple Bank did not share “the full truth” of its cum-ex transactions with him, admitting that “I did not want to know it”.
He conceded that he had “switched off my common sense” as he focused on a formalistic application of the law.
“I glossed over the fact that my legal advice was used for illegal means,” he told the court, adding that his professional career was now in tatters. “My approach was wrong, and I should not have kept quiet.”
Several former Maple employees have already been sentenced to jail terms over the bank’s conduct. A verdict is likely to be reached by the end of next month.
Freshfields has avoided direct prosecution over its advice to Maple, striking a deal in 2021 involving a voluntary payment of €10mn to the German tax authority. The firm has also paid €50mn to the administrator of Maple Bank.
The law firm has previously said in relation to the trial that “Freshfields is not a party to these proceedings, which associate to events more than a decade ago, and will not be commenting on the outcome”.
