March 2, 2024

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Sanjay Shah, a British merchant, is extradited to Denmark on fraud charges

Sanjay Shah, a British merchant, is extradited to Denmark on fraud charges

A British hedge fund trader accused of defrauding Danish taxpayers of $1.3 billion has been extradited to Denmark by the United Arab Emirates, where he had been living for more than a decade.

Trader Sanjay Shah was taken into police custody on Wednesday morning after arriving in Copenhagen, and is expected to appear in court on Thursday for a bail hearing.

Danish authorities had been pursuing Shah since they learned that starting in 2012, they said, he and his colleagues at Solo Capital in London had found a way to withdraw money from the local version of the Internal Revenue Service. The method involved complex and carefully designed trading to recover taxes on dividends. Mr. Shah has long maintained his innocence.

These alleged deals have been used by other traders to drain wealth from other countries in what one academic described as “the biggest tax theft in European history”. The toll has become clear in the continuing reckoning of arrests and prosecutions on the continent. Germany was taken for about $30 billion, France lost about $17 billion, and smaller amounts were taken from Poland, Norway, Austria, Italy, and others.

These countries have done little to warn others about graft deals. Denmark was one of the last countries affected, and has spent years trying to persuade and negotiate with the United Arab Emirates to extradite Mr Shah.

Peter Hammelgaard, Danish Minister of Justice, said: “The dividend issue is an important issue for Denmark and is one of the largest and most serious criminal fraud cases.” “Our public funds, the welfare state and our trust-based society are at stake.”

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Mr. Shah said he exploited a loophole, a loophole that lawyers advised him was perfectly legitimate. Mr. Shah, without admitting guilt, made an offer to settle the matter years ago, but the offer was immediately rejected, his publicist, Jack Irvin, said.

“It appears that the Danish government, legal authorities and the media have convicted Shah before trial,” Mr. Irvine wrote in a statement. “We need to ask, can he get a fair trial?”

Mr Shah moved to Dubai in 2009, saying he fell in love with the city. He lived for a time in a 10,000-square-foot villa with beach access and a $1.3 million yacht.

While Danish prosecutors painted him as a national villain, authorities in Britain, the United Arab Emirates and Germany began freezing his assets, and Mr. Shah was eventually forced to put his house up for sale, Irvine said. He has not traveled for years for fear of arrest.

Under pressure from Danish investigators, Mr. Shah was arrested in the United Arab Emirates in May 2022. It took months for the countries to sign an extradition agreement so that Mr. Shah could be sent to Denmark to stand trial.

This case will be one of many in its ongoing wake. Danish authorities have filed a lawsuit in London targeting dozens of financial institutions, seeking to recover about $1.7 billion in lost tax revenues.

In Germany, more than 1,000 lawyers and financiers are under investigation, many of whom have already been convicted and fined on similar charges. In May, Hanno Berger, the former tax investigator and alleged mastermind of the vice president’s deals in Germany, was sentenced to eight years in prison. He was extradited from Sweden, where he has lived since 2012.

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