Dubai arrests British man over $1.7b tax fraud case

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DUBAI, June 4, (AP): Dubai police said Friday they arrested and planned to extradite a British man to Denmark, wanted there for allegedly masterminding a $1.7 billion tax scheme, one of the country’s largest-ever fraud cases.

Sanjay Shah poses for a photograph on the Palm Jumeriah in Dubai on Sept 29, 2020. Dubai police said June 3, 2022, they arrested and planned to extradite Shah, a British national, to Denmark over his alleged involvement in a $1.7 billion tax scheme, one of the country’s largest-ever fraud cases. Shah has maintained his innocence. (AP)

The arrest of hedge fund trader Sanjay Shah came after Danish officials signed an agreement in March allowing for extradition between the United Arab Emirates and Denmark. Shah has maintained his innocence in interviews with journalists while living in Dubai over the last few years on the city state’s man-made Palm Jumeirah archipelago, but never appeared in Denmark to answer the accusations. It wasn’t clear if Shah, 52, had a local lawyer in the Emirates.

A court date did not appear to have been set in Dubai, the commercial capital of the seven-sheikhdom federation of the UAE. Prosecutors did not respond to a request for comment on Friday, the start of the Emirati weekend. A spokesman once associated with Shah, who ran the firm Solo Capital Partners, did not respond to a request for comment. The hedge fund manager had run a center for autistic children in Dubai that shut down in 2020 amid the attempts by Denmark to extradite him. He also ran the British-based charity Autism Rocks, which put on shows by major performers to raise money.

In a statement, Dubai police Brig. Gen. Jamal Al Jallaf said the emirate received an international arrest warrant from Denmark for Shah. Al Jallaf said Shah was accused of a fraud that saw foreign businesses pretend to own shares in Danish companies and claim tax refunds for which they were not eligible. “The fraud scheme, known as ‘cum-ex’ trading, involved submitting thousands of applications to the Danish Treasury on behalf of investors and companies from several countries around the world in order to receive dividend tax refunds,” Al Jallaf said.

Danish authorities say the scheme ran for some three years beginning in 2012. In a joint statement, Denmark’s Justice and Foreign Ministries praised Dubai’s arrest of Shah, whom they described as a target of the country’s prosecutors since 2015. “The Danish Treasury has been cheated for a staggering amount, and of course it should not be possible for suspected perpetrators to hide in the Middle East and thus avoid being held accountable in a Danish courtroom,” Justice Minister Mattias Tesfaye said. “Now I am awaiting the legal process in the United Arab Emirates, and crossing my fingers that it will end up that we can get Sanjay Shah on a plane to Denmark, so he can be prosecuted in this country,” he added. Shah is one of several suspects in the tax scheme sought by Danish authorities.

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