Switzerland extradites key figure of 'Cum-Ex' scandal to Germany

Swiss authorities on Thursday extradited a German lawyer sought by Germany on account of being a key leader of a massive tax fraud scheme called "Cum-Ex."

Hanno Berger, 71, was handed over to German police officials in the city of Konstanz in southern Germany, prosecutors based in Frankfurt said.

The German states of Hesse and North Rhine-Westphalia both sought his extradition. Berger was to appear immediately before a district court in Wiesbaden, the capital of Hesse, near Frankfurt, for a custody order.

Berger has been accused of being one of the main architects of a multibillion-euro tax fraud scheme that operated from 2005 until 2012.

Berger was arrested in Switzerland, where he lived in exile, in July. Switzerland's Federal Criminal Court ruled in favor of extraditing Berger to Germany last December.

Prosecutors accused Berger and others of promoting the tax fraud scheme. Berger, who helped represent himself, has always denied any wrongdoing, defending his activity as permissible by law.

Berger, a lawyer and tax consultant, cost German state governments billions of dollars. Other European states cumulatively lost more than €55 billion ($65 billion).

Even though Germany's top court has issued millions of dollars in fines on some individuals involved in the case, it is unlikely that governments will be able to make up for the loss.

Cum-Ex (Latin for "with-without") saw traders exploiting a loophole and making millions from state governments by filing bogus tax claims. They particularly profited in the wake of the 2008-09 financial crash. The practice involved participants' loaning each other shares in large companies so that it appeared to tax authorities that there were two owners of the shares, not one. Then both owners would report having paid taxes on share dividends, without it being done. This ultimately allowed traders to reclaim double the taxes they were owed.

Germany closed the loophole in 2012.