(Bloomberg) -- Christian Olearius, the former head of M.M. Warburg & Co. on trial for allegedly approving Cum-Ex tax deals costing Germany €280 million ($300 million), denied the charges against him, claiming he hadn’t known that short sales were used in the controversial trades. 

Klaus Landry, one of his four attorneys, told the Bonn court hearing Olearius’s case that prosecutors falsely depicted him as part of a gang that robbed money from the government. 

M.M. Warbung is Olearius’s life’s work and it’s inconceivable that he’d do anything to jeopardize that achievement at the end of a successful career, Landry said according to a manuscript of his statement.     

“He never did claim and he never would have claimed refunds of tax that wasn’t paid before,” Landry said. “He has always stressed that he knew nothing of short sales and that he assumed that this was dividend stripping.”  

Olearius, 81, is accused of 14 counts of aggravated tax evasion between 2006 and 2019. He knew all the details and “was personally involved,” prosecutors had told the judges on Monday.

The Hamburg-based lender’s Cum-Ex trades have been at the center of Germany’s first trial in Bonn over the controversial trading strategy, leading to the convictions of two former UK traders. Germany’s top criminal court backed that verdict in a landmark ruling. 

Landry said these judgments contort the presumption of innocence into a presumption of guilt for his client, as they already judged his action as criminal. The authorities probing him leaked his diaries and other material to the media, branding him as guilty before the trial even started, he added.   

Cum-Ex, a trading strategy that siphoned off at least €10 billion in revenue, employed short selling to take advantage of German tax laws so that multiple investors could claim refunds of a dividend tax that was paid only once. The nation stopped the practice in 2012. More than 1,800 people from the financial industry are being probed over the scandal.

The case is: LG Bonn, 63 KLs 1/22.

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