San Francisco Frontiers - British trader on trial in Denmark for massive fraud

Sanjay Shah, who was arrested in June 2022 in Dubai where he was living, is accused of running a nine-billion-kroner ($1.32-billion) scam that enabled companies he controlled to fraudulently claim Danish tax refunds between 2012 and 2015.

Shah, 53, on Monday pleaded not guilty and said he did not violate Danish law.

He faces up to 12 years in prison if the Glostrup district court in Copenhagen finds him guilty.

The United Arab Emirates extradited Shah to Denmark in December, after years of negotiations which included the signing of an extradition treaty between the two countries in March 2022.

The prosecution claims Shah "used a well-designed and organised fraud scheme to submit more than 3,000 applications to unlawfully receive more than nine billion kroner in dividend tax refunds from the Treasury."

In practice, foreign firms controlled by Shah pretended to own shares in Danish companies and fraudulently claimed dividend tax refunds.

The prosecution said it hoped to recover 7.2 billion kroner illegally acquired by Shah.

Describing the complexity of the case, prosecutor Marie Tullin told the court it involved more than 300,000 documents.

"It's not a secret to anyone that there are a lot of attachments," she joked.

One of Shah's defence lawyers, Kare Pihlmann, told AFP before the trial that it took almost 10 years for it to begin because of the "complexity of the case", its "international character" and "the problems in having Mr Shah handed over to Denmark".

Danish media have portrayed Shah as a father-of-three who flaunted his flashy lifestyle, while also raising money through charity concerts for an organisation he founded, "Autism Rocks".

- Dramatic turn of events -

Shah's former assistant, Anthony Mark Patterson, recently decided to plead guilty to being an accomplice.

On March 1, the Briton was sentenced to eight years in prison. The court may call him as a witness in Shah's case.

During his trial, Patterson said he was "thrown into deep water" as soon as he was recruited to Solo Capital, the investment fund Shah founded in 2013 and headed.

"By the autumn, when I fully understood the internal work processes, I became aware of the trading patterns when we had to plan the trades for 2014," Patterson told the court.

He expressed his "regret at having taken part" in the scheme.

Shah's lawyer told AFP his client was concerned about getting a fair trial in Denmark.

"Denmark has very, very good judges. Independent, professional. That's not the problem," Pihlmann said.

"The problem is that some government representatives, in particular cabinet ministers, have over the years made comments about the case, giving the impression that he is guilty of fraud," he said.

"That is a possible violation of the presumption of innocence."

The case has been widely covered by the media in Denmark, where the state is hoping to recover its money.

In January 2021, when the indictment was announced, the prosecution said it had managed to seize some three billion kroner, or about a third of the total.

"Generally ... it is very difficult or almost impossible to get the money back. And as a rule, all seized assets must be shared with the country which carried out the actual seizure," prosecutor Per Fiig said in a statement at the time.

Financial daily Borsen said Shah had "billions" in various bank accounts as well as properties in London -- including an apartment valued at around 125 million kroner -- that Danish authorities were eyeing.

In May 2023, a Dubai court ordered Shah to pay Denmark's tax authority over $1.2 billion, and another trial is also underway in Britain.

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

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

K.Torres--SFF