Sanjay Shah Sentenced to 12 Years for $1.35 Billion Danish Tax Fraud
COPENHAGEN, Denmark (CN) – A British businessman, Sanjay Shah, has been sentenced to 12 years in prison for his involvement in a massive tax fraud scheme in Denmark. The conviction, handed down by Glostrup Court near Copenhagen, stems from Shah’s role in a trading scheme that defrauded Denmark of an unprecedented 9 billion Danish kroner, equivalent to $1.35 billion.
As part of the ruling, 7 billion kroner ($1 billion) of Shah’s assets, approximately 80% of the amount he allegedly pocketed, will be confiscated. This sentence is the longest ever imposed in Denmark for a financial crime.
“The Magistrate’s Court has found it proven that the defendant Sanjay Shah had a central role in the construction and operation of the scheme,” the judge stated.
The case revolves around a complex “cum-ex” trading scheme, a highly aggressive form of dividend arbitrage, also known as dividend stripping. This strategy, used to exploit discrepancies in stock dividends, has gained notoriety in Germany and across the EU in recent years.
Prosecutor Marie Tullin expressed satisfaction with the court’s decision, describing it as a significant milestone in the long-running investigation into this type of tax fraud. “It is also a milestone in this dividend tax complex, which we have worked hard on for many years,” Tullin said in a statement to Danish public broadcaster TV2.
Shah’s fraud occurred between 2012 and 2015, during which he secured dividend tax refunds from stocks that were never actually purchased. The court found that Shah had orchestrated this fraud to extract millions from Denmark’s treasury.
Shah’s defense attorney, Kåre Pihlman, voiced disappointment following the harsh sentence. “When you have been defending a man for nearly eight years and then face a historically harsh sentence of 12 years, it is of course a disappointment,” Pihlman told TV2.
Shah, who appeared in court wearing a red Santa hat, immediately announced his intention to appeal the sentence. Shah, who has consistently denied the charges, maintains that he exploited a loophole in Denmark’s tax laws. “We will see you at the appeal in Landsretten,” Shah told reporters, referring to Denmark’s second-tier court.
The trial, which began in March, was originally set to last 15 months but concluded earlier after Shah chose not to challenge the prosecutor’s account of how the scheme was executed.
Tax authorities first became aware of the fraud in 2015. Shah’s name surfaced during a two-year investigation, which ultimately led to his extradition from Dubai, where he had been residing. In 2023, after a lengthy legal battle, Shah was finally brought to Denmark to face trial.
Anthony Mark Patterson, Shah’s former associate, was sentenced in March to 8 years in prison for his involvement in the fraud. Patterson admitted to his role and cooperated with authorities, providing details about Shah’s operation of the fraudulent scheme. Patterson confirmed that Shah’s companies, including those he managed, were central to the execution of the scam.