German bankers charged in emissions trading case

Prosecutors did not identify the bank, but people familiar with the case say the accused are mid-ranking employees of Deutsche Bank, which was raided in 2012 as part of the investigation.

The German prosecutor said that eight employees have been charged in an 865-page indictment, whose ages range from 33 to 64-years, including those who are already retired.

The European Union’s spot carbon market was hit by so-called carousel trade in 2009 and 2010, in which buyers imported emissions permits in one EU country without paying value-added tax (VAT) and then sold them to each other, adding tax to the price and pocketing the difference.

In December 2011, a Frankfurt court jailed three Britons, two Germans and a Frenchman for between 10 months and seven years for their involvement in the scheme. The European police agency Europol has estimated that such crime has cost taxpayers more than €5bn (£3.6bn) in lost revenue since 2008. “We are cooperating with the authorities concerned”.

The Frankfurt prosecutors explained those charged with fraud had used the mechanism to file incorrect VAT notifications at Deutsche’s tax department in cooperation with companies unwilling to pay for their emissions, resulting in losses totaling 220 million euros ($245 million).

The employees included corporate customer representatives and a member of the bank’s tax department.

But the spokesman said that “the investigation into the carbon emission certificates is ongoing and covers all relevant facts”. It is now up to a judge to take up the case, based on the prosecutors’ accusations.