Niall Hearty of Rahman Ravelli outlines the latest case regarding the share-selling tax rebate scheme.
A US investor has settled claims brought by the Danish tax agency SKAT over his alleged involvement in the controversial share-selling scheme Cum-Ex.
SKAT agreed to settle claims it had brought against Bradley Crescenzo and two of his supposed pension plans, The Bravos Advisors 401K Plan and The Kodiak Capital Pension Plan.
It had accused Crescenzo and his pension plans of taking part in a $2.1 billion Cum-Ex scheme. Under Cum-Ex, a loophole in dividend payments was exploited so that more than one party could claim rebates on capital gains tax, even though that tax had only been paid once at most.
A New York federal court dismissed the allegations at SKAT's request. It also dropped four other complaints against Crescenzo that had accused him of using the same tactic to claim rebates through Regoleth Pension Plan, Kyber Pension Plan, Stark Pension Plan and The Skybax LLC 401K Plan.
Days earlier, SKAT had asked the court to dismiss allegations against four other pension plans, saying it had settled its claims against them.
Losses
These cases are just some of the more than 300 that SKAT has brought as it seeks to recoup Danish treasury losses to Cum-Ex, which saw billions being paid out in what are now being viewed as fraudulent claims.
SKAT had originally brought the legal action regarding Bravos and Kodiak against Crescenzo's brother Gavin in 2018. But it amended this two years later, claiming Bradley Crescenzo was the only person involved in Bravos and Kodiak and that he made the Cum-Ex claims to SKAT from his home in Connecticut. SKAT alleged that, instead of being genuine pension plans, Kodiak and Bravos were created solely to submit Cum-Ex claims. It said they each made 14 Cum-Ex claims in 2015 for tax rebates which related to shares that they had falsely told SKAT they owned.
SKAT had also alleged that Gavin Crescenzo was involved in at least 18 US entities that claimed to own shares in Danish companies and had made fraudulent Cum-Ex claims. It has agreed to reach a settlement with Gavin Crescenzo.
Given the size of the Danish treasury losses and the sheer volume of litigation that SKAT has commenced internationally due to Cum-Ex, it is unlikely that we will see an end to these types of claims in the near future. Each one, however, will be determined on its own merits.
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