British businessman found guilty of £1.4 billion fraud

A British hedge fund trader has been sentenced to 12 years in prison in Denmark after being found guilty of committing tax fraud that cost the Danish government more than £1 billion.

This is the largest fine ever handed down in a fraud case in Denmark.

In addition to the prison sentence, financier Sanjay Shah, founder of London-based hedge fund Solo Capital Partners, was given a permanent entry ban to Denmark and will have assets worth $1 billion (DKK 7.2 billion) confiscated, as well as a Series of properties.

He has said he plans to appeal the decision.

His lawyer Kare Pihlmann told the BBC, “We recognize that there is every possibility that the High Court could reach a different conclusion, and obviously we are also hoping for a more lenient decision.”

Shah entered the courtroom wearing a navy hooded sweatshirt and a red Santa Claus hat.

The 54-year-old Briton, seated among his lawyers, was calm and straight-faced as the judge read out the verdict.

Nanna Blach told the court that Shah had played a “completely central and controlling role” in a scheme that led to “unjust” payments, adding that the crime was “meticulously planned and organised”.

The sentencing followed a high-profile trial that lasted several months.

Prosecutors had accused Shah of masterminding the so-called co-exist scheme, which used a series of complex trades to defraud more than £1 billion (DKK 9 billion) in dividend tax refunds from the Danish treasury between 2012 and 2015. Was used.

Shah had repeatedly denied any wrongdoing, arguing that he had used legal loopholes. His defense lawyers had tried several times to have the case dismissed.

Danish prosecutor Marie Tullin told the BBC that the maximum sentence given to Shah reflected “the exceptionally large amount, the time involved and his role in managing this fraud against the Danish state over many years.”

“In terms of amount, this is the biggest (fraud) ever,” he said. “I think that sentence speaks for itself, this is a crime that has never been seen before on this magnitude.”

Before his arrest, Shah was living in Dubai, where he was reportedly known for throwing lavish parties and hosted concerts with performances from prominent celebrities for his autism charity.

He was arrested in 2022 and extradited from the UAE to Denmark in December last year.

According to Reuters, so-called low-X trading schemes have flourished since the 2008 financial crisis, which left Germany, Belgium and Denmark among the European countries hardest hit.

The schemes typically involve the rapid sale of large amounts of shares from one investor to another immediately before the dividend is paid, making duplicate claims of withholding tax possible.

Earlier the Danish government had said that the cost of the co-ex plans was more than $1.8 billion (12.7 billion DKK). Shah was one of nine British and American citizens charged with defrauding the state.

Shah also faces a parallel civil tax fraud case filed by the Danish tax authority in London, which is due to conclude in April.

As he walked out of the court escorted by police officers, once again wearing a Santa Claus hat, Shah smiled at reporters and said, “See you next year.”