Denmark has charged two British nationals, including one who resides in Dubai, in its largest tax fraud case.
Prosecutors said on Thursday they had charged the pair with unlawfully obtaining more than $2.03 billion via a bogus trading scheme to make double tax claims.
They told The National identities of the accused will be disclosed in a week, when the criminal indictment is made public and a date for trial is set.
Denmark's tax agency SKAT has identified millionaire Dubai hedge fund manager Sanjay Shah as the mastermind behind the 'cum-ex' trading scheme.
He is at the centre of Denmark's most expensive civil legal case, due to begin at London's High Court in March. A spokesman for Mr Shah told The National he denied all wrongdoing.
"Mr Shah continues to deny any wrongdoing and stresses that he took professional advice before carrying out the trades," he said.
Under Danish law, suspects are not identified by name when charged until after a court has been convened.
"This is a case of extremely serious and extraordinarily extensive crime committed against the Danish state, and we believe that the two defendants committed cynical and meticulously planned fraud in a scheme where they defrauded the Danish state of 9 billion crowns [$2bn]," state prosecutor Per Fiig said.
The fraud scheme, known as 'cum-ex' trading, involved submitting more than 3,000 applications to the Danish treasury on behalf of investors and companies from several countries in order to receive dividend tax refunds, the prosecutor said.
The other person charged resides in the United Kingdom. Prosecutors told The National they will be doing everything in their power to bring the accused to Denmark to face trial. This includes extradition proceedings.
Authorities have been investigating the case since 2016 in co-operation with counterparts in Germany, Belgium and the UK and more than $495m from various persons and companies has been seized.
“The investigation against other suspects in several other tracks of the dividend reclaim case continues,” Danish State Prosecutor for Serious Economic and International Crime said.
The development marks something of a milestone in a case that has outraged Danes since they learnt that international financiers had stolen around $2bn from the state.
Last year, Danish authorities placed a worldwide freezing order on many of Mr Shah's assets, including a $20m home near London’s Hyde Park, as it seeks to recoup losses from the scam.
The Danish tax authority has launched the legal action in the UK where many of the companies allegedly involved are based.
SKAT claims that Mr Shah was a central player in a scheme in which foreign companies pretended to own shares in Danish companies, then claimed tax refunds for which they were ineligible.
Mr Shah claims that he was exploiting a legal loophole to make trades at the heart of the allegations. He said his schemes were a "widely known and wholly legitimate trading strategy" but have been stopped by other European governments.
Last year, a centre for autistic children in the UAE funded by Mr Shah was closed because of the global asset freeze on his multi-million-pound fortune.
His company Solo Capital Partners, which closed in 2016, was the main funder of the Autism Rocks Support Centre, charity financial records show.
Mr Shah’s wife, Usha – described as founder and chief executive of the centre – is one of the 92 defendants accused of involvement in the tax fraud, according to documents filed in the High Court.
She is said to have been the sole director of a company that saw tens of millions of pounds pass through its accounts from the tax operation.
The UK-based Autism Rocks charity was set up in 2014 and sought to raise money by organising concerts that featured artists including Prince, Joss Stone and Elvis Costello.
The support centre was launched three years later in Dubai and described as a “boutique centre offering evidence-based therapies that work”.
