Two US tax advisers who falsified dividend payments have been sentenced in Belgium to two years in prison and ordered to pay €13.3 million in damages, in the latest case involving Europe’s largest ever tax scam.
Matthew S. and Jerôme L. were found guilty of forgery and fraud in March by the Brussels Court of Appeal over a trading scheme that used tax loopholes to defraud the Belgian government of an estimated €23 million.
The judgement has not been made public, but a copy was obtained by Follow the Money and Belgian newspaper De Tijd.
The pair – former KPMG employees who later set up their own asset management firm – are also due to stand trial soon in Denmark, where they are accused of defrauding the treasury of hundreds of millions of euros through so-called CumEx trading.
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In 2021, the global investigative collective The CumEx Files – which includes FTM – revealed that bankers, investors, pension funds, and intermediaries had collectively defrauded 12 countries of around €150 billion.
The partnership behind the Belgian case traces back nearly three decades.
Matthew S. and Jerôme L. met while working as tax advisers for KPMG in New York in the late 1990s. From 2005 to 2013, they were partners at the US asset management firm Argre Management.
The two men then set up the US company Maple Point in 2013, established a series of US pension funds, and acquired Germany’s North Channel Bank. With that network, they carried out CumEx trades that targeted several European treasuries.
In 2015, Denmark’s tax authority reported that foreign companies had cheated state coffers out of the equivalent of nearly €1 billion through fraudulent claims for dividend tax refunds.
The Danish taxman in 2019 reached a settlement worth about 214 million euros with Matthew S., Jerôme L. and a third suspect – Luke M. – for their part in CumEx trading.
Some two years later – in April 2021 – prosecutors in Denmark brought criminal charges against the trio over the issue. The trial will start next month, Danish public broadcaster DR News reported.
A web of court cases
Matthew S. and Jerôme L. have been entangled in civil and criminal proceedings over the CumEx scandal for years, and the worst may still be to come.
In February 2025, a US court found their former business partners at Argre Management liable for fraud and ordered them to pay $500 million in damages to Denmark’s tax authority (SKAT).
Then, in September, Matthew S., Jerôme L, and Luke M. lost a US civil case in which they accused SKAT of breaching the 2019 settlement by failing to inform the Public Prosecutor’s Office of its existence and terms.
The court rejected their claim and upheld SKAT’s counter-argument, leaving the trio responsible for paying the outstanding balance under the settlement.
The Danish fraud trial against Matthew S., Jerôme L. and four others is due to begin on 2 June in Glostrup, near Copenhagen. They are accused of serious fraud, which carries a maximum jail sentence of up to 12 years.
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Fold in
Belgium’s probe into Matthew S. and Jerôme L. began in 2016.
The fraud involved the pair forging documents to falsely claim they had received dividends on Belgian shares, despite the fact they had never been shareholders or received any payments, according to the ruling by the Brussels Court of Appeal.
The falsified documents were then used to reclaim dividend tax that had been withheld by the Belgian authorities.
The court said the US pension funds managed by Maple Point Limited after its acquisition of North Channel Bank were “the linchpin of the fraud scheme”.
Matthew S. and Jerôme L. established and managed the funds, then brought them brought them as clients to North Channel Bank.
The pair’s claim that, as members of the bank’s supervisory board, they had no involvement in operational or managerial decisions was “manifestly contradicted” by the criminal case file, according to the Belgian court’s ruling.
They had “acted as the key figures in a criminal organisation”, the judges said.
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Matthew S. and Jerôme L. were both sentenced to two years’ imprisonment – which they do not have to serve – a professional ban, and a fine of €300,000.
Together, they must also pay €13.3 million in damages to the Belgian state, plus interest accruing from January 2016.
The two men have maintained that their business model amounted to a legal form of “dividend arbitrage”.
Matthew S. and Jerôme L. have appealed the judgement to Belgium’s highest court, the Court of Cassation. Belgian prosecutors have also appealed, but the rationale for their challenge is unclear.
The pair’s lawyers and the Belgian Public Prosecutor’s Office declined to comment while proceedings are ongoing.
Two other defendants – a father and son who had initially been sentenced to 18 months in prison, fines of €12,000 and forfeitures of €1.1 million – were acquitted by the Brussels Court of Appeal. The court found it could not be proven that the short traders had knowingly participated in the fraud.
“There is no sign that the defendants were aware of the fact that no shares had actually been purchased,” the judges stated.