Indian-origin trader in Denmark gets 12-year jail for $1.2-billion tax fraud

A 54-year-old Indian-origin British hedge fund trader has been sentenced to 12 years in prison in Denmark after being found guilty of tax fraud that cost the Danish government over $1.2 billion. The fraud involved a so-called “cum-ex” tax scheme. The sentencing of Sanjay Shah is one of the longest prison sentences in Denmark’s history for tax fraud. Shah has appealed in the Danish High Court but will be in custody.

Shah, founder of London-based hedge fund Solo Capital Partners, was also handed a permanent entry ban to Denmark and will have assets worth $1 billion (Danish Krone (DKK) 7.2 billion) seized, including several properties, according to the BBC.

Shah, who wore a navy hooded sweatshirt and a red Santa Claus hat in court, remained calm as the judge read out the verdict. The court heard that Shah played a “completely central and controlling role” in the scheme, leading to unjust payments. The crime was described as meticulously planned and organised.

However, Shah repeatedly denied any wrongdoing, arguing that he had used legal loopholes, reported the BBC.

He immediately appealed the verdict to the Danish High Court but will remain in custody.

Shah was arrested in 2022 in Dubai and extradited to Denmark in December last year.

Before his arrest, he had been living in Dubai, where he was known for his lavish parties and for hosting concerts through his charity — Autism Rocks — featuring major celebrities, the BBC reported.

The sentence followed a high-profile trial over trading schemes that had syphoned billions of dollars from public treasuries across several European countries after the 2008 financial crisis.

Prosecutors found that Shah masterminded the “cum-ex” scheme, fraudulently reclaiming more than 9 billion Danish crowns (approximately $1.27 billion) in dividend tax refunds from the Danish treasury between 2012 and 2015, according to Reuters.

The Danish government has previously stated that cum-ex schemes have cost it over $1.8bn (12.7 billion DKK). Shah was one of nine British and US nationals accused of defrauding the state.

Shah also faces a separate 1.44 billion pound ($1.83 billion) civil tax fraud case in London, filed by the Danish tax authority, that is due to conclude in April, according to Reuters.