Danish court sentences British businessman to 12 years in prison for massive fraud

A Danish court on Thursday sentenced a British hedge fund trader to 12 years in prison for defrauding Danish tax authorities of hundreds of millions of dollars between 2012 and 2015.

Sanjay Shah, who has denied the charges, was convicted of a nine billion kroner ($1.27 billion) scam that allowed companies he controlled to fraudulently claim Danish tax refunds between 2012 and 2015.

The court also ordered Shah’s deportation from Denmark after serving his sentence and confiscation of assets worth 7.2 billion kroner.

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Shah wished reporters a “Merry Christmas” as he appeared in court wearing a Santa Claus hat before receiving Denmark’s toughest sentence ever for financial crimes, broadcaster DR reported.

At the last hearing in September, he assured the court that he had acted in good faith.

During the trial, which began in May after a nearly 10-year investigation, the investigation revealed that shell companies controlled by Shah pretended to own shares in Danish companies and received tax breaks for which they were not eligible.

Prosecutors said they had identified more than 3,000 such claims using what they described as a “well-designed and organized fraud scheme”.

In January 2021, when the indictment was announced, the prosecutor’s office said it had already seized about three billion kroner.

In May 2023, a court in Dubai ordered Shah to pay more than $1.2 billion to the Danish tax authority, and another trial is also underway in the UK.

So-called “cum-ex” and “cum-cum” scams, which take advantage of a loophole in European tax laws, have been discovered in several EU countries.

The scheme involved buying and selling shares during the dividend payment period so quickly that the tax authorities could not identify the true owner, making it possible to illegally claim tax credits on the profits.

According to Bloomberg estimates, the scams have cost European taxpayers up to 150 billion euros ($157 billion).

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