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  • Invesco OppenheimerFunds Deal to Create $1.2 Trillion Combined AUM

    Invesco OppenheimerFunds Deal to Create $1.2 Trillion Combined AUM

    Mass Mutual and Invesco yesterday, October 18, 2018, announced an acquisition of OppenheimerFunds and merger that will create a combined asset management firm that will become the 13th largest in the world, with total assets under management (AUM) of $1.2 trillion.

    Off the back of the deal, at the time of writing, Invesco shares were up 3.8% to $21.74.

    Under the agreement, Invesco Ltd will acquire Massachusetts Mutual Life Insurance Company (MassMutual) affiliate OppenheimerFunds. Shareholders of MassMutual and OppenheimerFunds will receive common and preferred shares, and MassMutual will become a major shareholder in Invesco. MassMutual’s stake in Invesco will be around 15.5 percent and become its largest shareholder.

    Benefits for Clients and Investors

    The deal will create a new, larger, asset manager opening up additional scaling for clients and shareholders. The range of investment capabilities will enhance Invesco’s ability to meet the demands of its global clients, says the press release. Invesco will become the sixth-largest retail investment manager in the US.

    Invesco will also benefit from OppenheimerFunds’ high performing investments, its strong international and emerging markets equity franchise, and its US third-party distribution platform. Invesco will continue to lever its diversified portfolio and global presence as well as its technology-enabled client services.

    Martin L. Flanagan, President and CEO of Invesco said the deal would accelerate Invesco’s growth and that:

    “This is a compelling, highly strategic and accretive transaction for Invesco that will help us achieve a number of objectives: enhance our leadership in the US and global markets, deliver the outcomes clients seek, broaden our relevance among top clients, deliver strong financial results and continue attracting the best talent in the industry.”

    OppenheimerFunds’ picks many international investment stocks and bonds for its portfolio. In an interview with LiveMint today, Flanagan said that despite investors appearing to choose index tracking over active investment funds:

    “Investors are looking for a broad range of ways to have us meet their outcomes—it is high-conviction active management, it is passive, and it is alternatives.”

    The acquisition and merger are expected to increase Invesco’s earnings per share by around 18% in 2019 and around 27% in 2020. These predictions may have been fuelling the demand for Invesco’s shares.  The deal will be finalized in the second-quarter of 2019 subject to regulatory and third-party approvals.

    Featured image from Shutterstock.

  • China Growth Slows Down in Q3 to Hit a 10-Year Low

    China Growth Slows Down in Q3 to Hit a 10-Year Low

    It’s not good news for the Asian tiger this morning as China growth reaches its slowest quarterly growth since the economic crisis. With the most disappointing growth figures in a decade, the numbers will increase the pressure on Chinese President Xi Jinping as the US trade war blazes on in the background.

    China reported its slowest quarterly growth at 6.5% YOY in Q3, although the Chinese government says that they are still on track to exceed the yearly target of 6.5%. GDP was also lower than analysts expected.

    China Growth
    Source FT

    NBS (National Bureau of Statistics for China) spokesperson Mao Shengyong said that China was facing:

    “extremely complex environment abroad and the daunting task of reform and development at home.”

    Slower China Growth the Way of the Future?

    The NBS reported that it was likely to see a slower growth and “greater downward pressure” in the future. However, China’s economy is resilient and so far, its investment trends remain stable. Moreover, the trade sector is still reporting figures better than expected.

    The Chinese stock markets have also taken large tumbles this year, and the CSI 300 that tracks the largest companies in Shenzhen and Shanghai declined by a massive 25.5%. The Chinese government appears to remain unfazed by this decline and will take the necessary moves to restore investor confidence and hand out merger approvals quicker.

    In a report by the Chinese Academy of Social Sciences earlier this week, analysts reported that the Chinese economy would grow by 6.6% in Q3, missing their target slightly.

    The slowdown in China growth appears to have been provoked by rising US interest rates along with the US/China trade war that’s leaving many Chinese companies out of pocket.

    However, an official campaign against financial risk has also served to bring property and infrastructure to a halt, with some major projects like the subway lines in northern cities outright canceled.

    Other Figures Not So Bad

    Industrial production and retail sales both increases by 5.8% and 9.2% respectively compared to 6.6% and 10.3% this time last year. Moreover, trading activity despite the trade war has been reasonably strong. The tariffs imposed by Trump did not come into effect until late September, which means Q4 could see even more disappointing results.

    Featured image from Shutterstock.

  • How Chinese Authorities Caused Tencent $200 Billion Stock Wipeout

    How Chinese Authorities Caused Tencent $200 Billion Stock Wipeout

    The Chinese company Tencent expects a 20% drop in revenue for Q3 of 2018, as China’s repression on computer games licenses could last until next year. The news comes after the company has already lost 40% of its market value, crashing from $578 billion in January to $380 billion now.

    The huge decline drove Tencent out of the top 10 largest companies. Before the Chinese government stopped approving licenses, Tencent was the fifth largest company in the world, ranking higher than Facebook and JPMorgan Chase. Now, it has slipped to position 11.

    Ceased Sales for Monster Hunter in August

    Problems started in August when the Chinese authorities canceled the operating license for Tencent’s Monster Hunter: World. The company had to cease sales a day after the launch of the new video game and offer refunds for over 1 million pre-orders.

    It wasn’t the first time the rigid Chinese regulations put the breaks on Tencent’s revenue and valuation. In 2017, the company had to limit the time children were spending playing Honor of Kings, which cost Tencent a $15 billion loss in market value.

    Less than 2,000 Games Approved in China in 2018

    The government crackdown on online gaming was expected to last a month, but it may take a lot longer before companies have permission to launch new games for monetization. A director of the games unit of one of China’s biggest tech companies stated for the Financial Times that:

    “there won’t be approvals this year.”

    Beijing is trying to temper online gaming in China, which is by far the largest market in the world. Authorities are worried about children being “addicted” to video-games and want to limit the effects of gaming on children’s vision, according to officials.

    This year, the Chinese government approved 1,931 video games, compared to 9,000 games last year.

    Tencent Growth Prospects

    Analysts believe that Tencent has “strong long-term growth prospects” thanks to its ability to make money despite the game licensing freeze. Karen Chan, equity analyst at Jefferies Hong Kong, for China Daily said:

    “We believe Tencent remains the most resilient online game player with huge monetization potential in advertising and content. Although the game approval resumption timeline remains uncertain, Tencent’s 15 mobile games in the pipeline with secured monetization licenses should provide some buffer.”

    The Chinese tech giant makes more than 40% of its revenue from video games, being the most important player in the Chinese gaming market. However, the company doesn’t rely entirely on gaming, as one of the most valuable tech companies in China.

    Tencent also owns the WeChat messaging app (which has around 1 billion users), the WeChat Pay payment services (800 million users), and Tencent Music, which is China’s largest streaming service with 800 million users.

    Featured image Tencent.

  • Powerball Jackpot Now Worth $430 Million After No Winner Announced

    Powerball Jackpot Now Worth $430 Million After No Winner Announced

    American lottery game Powerball which is played in more than 44 states announced they did not sell any winning tickets for the $378 million draw yesterday. A nonprofit organization, the Multi-State Lottery Association (MUSL) coordinates the drawings. Winnings of Powerball’s starting jackpot of $40 million can either be paid in 30 installments or in one lump-sum cash payment.

    Nobody had the luck of buying the ticket with these winning numbers: 03, 57, 64, 68, 69, Powerball: 15, PowerPlay: 3X. The next draw, which will take place on Saturday, will be one of the biggest in the country’s lottery history.

    The lottery jackpot for the following Powerball draw has risen to $430 million, with a cash option of $248 million. On just a handful of other occasions have the stakes been so high.

    In case you bought your Powerball ticket and didn’t check it yet, don’t throw it away. There were thousands of tickets sold in the New York area which won smaller prizes and three winning tickets worth $1 million that were sold nationwide. Are you the next millionaire?

    Second Place Is Not that Modest Either

    You don’t have to be disappointed if you didn’t buy the winning ticket. By matching all five numbers, you could win a second prize of $1 million in Powerball. However, no one won the second prize of $2 million in Power Play, which you can participate in for an additional $1.

    To win the Mega Millions grand prize your odds are 1 in 302,575,350. However, your odds of winning Powerball are a bit better at 1 in 292,201,338.

    What Was the Largest Jackpot in History?

    Featured image from Shutterstock.

  • Mexican Boxer Canelo Alvarez Signs $365 Million Contract with DAZN

    Mexican Boxer Canelo Alvarez Signs $365 Million Contract with DAZN

    Ginger-haired Mexican boxer Saul ‘Canelo’ Alvarez has just signed the largest TV deal in sports history with the sports streaming service DAZN. The deal is reported to be worth a startling $365 million over a five-year period as DAZN is looking to revolutionize the way boxing and sports content is consumed in America. Canelo Alvarez is the biggest name in world boxing and the darling of the Mexican public.

    The news that Canelo has signed this groundbreaking deal with DAZN is a massive boon for the sports streaming service who now cements itself as a major player in televised sport across America.

    The move by DAZN is also a firm indicator that online streaming services could well be taking over sports coverage in the next few years as the traditional broadcasting and cable businesses still struggle with the changing ethos of modern-day content consumption.

    Boxer Canelo Alvarez Is Going Online

    At a glitzy press conference on Wednesday in New York, Canelo’s promoters, Golden Boy Promotions became the focal point of the sporting world. DAZN and Golden Boy announced they have signed an 11-fight-deal to stream Canelo’s fights over a five-year period that will be worth at least $365 million.

    Not only will it become the largest TV deal in sports history, but Alvarez could well be finishing his career on DAZN.

    Since HBO recently announced it was pretty much removing itself from boxing coverage for the first time in over 40 years, the only major player in the industry was Showtime Boxing. Smaller boxing promotions in America such as PBC and ESPN make some noise and are great for hardcore fight fans, but they are not on the same level as Showtime or DAZN.

    Mexican boxer Canelo Alvarez is the biggest name in world boxing with the highest-paying deal ever, alongside the unified British heavyweight champion Anthony Joshua, who sells out 80,000 people stadiums in the UK.

    Joshua has also recently signed a multiple fight deal with DAZN to stream his fights in America. The British heavyweight kingpin is part of the Matchroom Boxing USA stable who recently secured 1-billion dollars to stream over 30 fights per year on DAZN over the next two to five years.

    A Sports Content Revolution

    We’re currently watching a sports content revolution happen before our eyes. Fighters such as Canelo usually command in the region of $80 to $90 for PPV fights. But this new service from DAZN is a game-changer.

    The new DAZN streaming app is only $9.99 dollars per month and will now include 11 Canelo fights over the next five years, several fight cards per year from Golden Boy, Anthony Joshua fights and a total of 32 shows from Matchroom boxing from the US and UK. When you couple this with DAZN’s Bellator MMA coverage and fight fans are in for a real treat.

    DAZN already has a firm foothold in Germany, Japan, and Canada, but is now targeting the US with more deals apparently in the pipeline for other American sports.

    Featured image by Presidencia de la República Mexicana.

  • Rupert Murdoch to Make Each of His Six Children Wealthier by $2 Billion

    Rupert Murdoch to Make Each of His Six Children Wealthier by $2 Billion

    Just like the massive $71.3 billion deal by Disney to acquire 21st Century Fox grabbed eyeballs, the latest news about Rupert Murdoch’s six children, each set to make a windfall gain of $2 billion from the acquisition process is making global headlines.

    The deal, which is expected to close sometime by the end of this year, is pending approvals from EU and Chinese regulators. The news first reported by the Financial Times said that the payout of $2 billion to each child comes from the breakdown of his media empire, and derived from a 17% stake of the Murdoch Family Trust that it holds in 21st Century Fox, valued at $12 billion at $38 per share.

    The $12 billion figure also includes the proceeds from the sale of Fox’s 39% stake in Sky, Europe’s biggest satellite TV provider, to Comcast for $15 billion in September this year. The deal doesn’t include the Murdoch Family’s stake in News Corp which owns Fox News channel and Fox Broadcast network.

    Rupert Murdoch Allocates an Equal Share to His Six Children

    Murdoch has six children from his three wives, of which four children, Prudence Murdoch (60), Elisabeth Murdoch (50), Lachlan Murdoch (47) and James Murdoch (45), are direct beneficiaries of the Trust. Two other children Grace Murdoch and Chloe Murdoch are minors who don’t have voting rights and are managed by trustees.

    Rupert Murdoch Family
    Image by Peter Nicholls/Reuters/Newscom

    Disney has given options to investors in a mix of shares or cash and there are no details about what option Rupert Murdoch will choose for each beneficiary. Murdoch still keeps control of the trust in his hand but has no financial interest.

    After the closure of the deal, he will remain involved with daily affairs of the family business and work alongside with his eldest son, Lachlan, who will be appointed as the new CEO and Chairman of Fox News.

    In the last fiscal year that ended in June, Rupert Murdoch made total earnings of $49.2 million from his trust, that includes $7.1 million as salary, and $23.3 million in stock awards and other benefits.

    Due to the special stock awards linked to the Disney deal, his earnings surged 68% compared to previous fiscal year which was at $29.3 million. On the other hand, Lachlan Murdoch, who is Executive Co-chairman made $50.7 million compared to $20.6 million the previous fiscal, up by 146%.

    The overall deal to acquire 21st Century Fox has witnessed some interesting turns of events which led to this eye-popping value. On December 2017, Disney announced its intention to acquire Fox for $52.4 billion in stock options which remained uncontested with no counter bid by another company until May 2018.

    On June 13, 2018, Comcast made a counter-offer of $65 billion in an all-cash deal that initiated a bidding war. A week later, Disney revised its offer price to $71.3 billion and Comcast backed out of the process to focus entirely on acquiring controlling stake in Sky.

    Featured image by Eva Rinaldi.

  • Billionaire Eddie Lampert’s Bizarre Ideas Behind Sears’ Grand Closing

    Billionaire Eddie Lampert’s Bizarre Ideas Behind Sears’ Grand Closing

    Eddie Lampert was in a position to revolutionize the US retail sector. A little over a decade ago, he was worth a touch more than Amazon’s Jeff Bezos, at nearly $4 billion. Now he’s still at the helm of Sears, which filed for bankruptcy protection on Monday of this week.

    Some market commentators have speculated that an eroding middle class is to blame for Sears’ troubles, but Eddie Lampert is a far more probable culprit.

    The modern Sears was created in 2005 when Eddie Lampert merged it with another American retail icon, Kmart. His move to sell off a bunch of real estate assets that Kmart controlled helped Mr. Lampert to gain billionaire status a few times over–and attracted a lot of attention from major players on Wall St.

    In the wake of his inspired Kmart deal, Eddie Lampert was actually able to take over Sears. Kmart’s shares were riding high in 2005, and Eddie made his move.

    It would be the beginning of a long slow grind downward, which Eddie Lampert’s ideas were almost wholly responsible for. The big problem is that he had no clue how to actually run a retail business, or sink money into staying competitive.

    Dear Eddie Lampert, There’s a New Technology Called “the Internet”

    At their cores, the business model that a company like Amazon and a company like Sears use aren’t wildly different. Both companies sell a whole bunch of consumer stuff to the public. The big divergence between how the two companies operate is how people buy from the retailer.

    Amazon allows shoppers to use a website to make their purchases, while Sears used big stores that were expensive to operate, and required much higher levels of staffing. It should be clear by now that Mr. Lampert’s decision to shun spending on developing a web presence was probably one of the worst ideas in US retail, ever.

    Instead of using Sears’ deep pockets and extensive network of stores to create a hybrid business model that embraced online shopping, Eddie Lampert decided to cut spending on keeping up the appearance of Sears’ stores. He also subdivided Sears Holdings into 30 different “silos,” and then made the leaders compete for dwindling resources within the company.

    The ideas that Eddie brought to the table were certainly innovative, much in the same way that a massage given with chainsaws would be. The end result is also the same. Now the corporate entity that Eddie Lampert has been slowly bleeding for more than a decade is a total wreck.

    People Don’t Want to Shop in Ruins

    While Eddie was turning his back on online retail, his strategy to cut costs via removing remodeling budgets from Sears’ annual spending ensured that his company couldn’t compete with other big-box retailers like Walmart and Target. The idea that one can just abandon a store’s aesthetic upkeep, and leave its employees to attract clients based on their efforts is totally absurd.

    Sears bankruptcy
    Image from Shutterstock

    Apparently, Eddie Lampert was known for running Sears from one of his two multi-million dollar mansions, which would explain why he was almost totally disconnected from what Sears’ locations were turning into. Not that Target or Walmart are exactly a treat for the senses, but they aren’t slowing degrading from a decade ago either.

    Perhaps the most difficult thing to understand in all of this is how Eddie Lampert is still in charge of anything. He clearly has no idea how to keep a business competitive. In fact, he doesn’t seem to understand that retail stores need to be kept up to attract customers. Now Sears is a mockery, and if they emerge from bankruptcy one wonders what kind of market they could hope to serve.

    As for Eddie Lampert, he still has some nice houses and a massive yacht that’s named after an Ayn Rand novel. The bumbling (barely) billionaire is still trying to make deals to sell off Sears’ assets, some of which were blocked due to the fact that he was behind the company trying to buy the assets from Sears.

    With so much money gone, and so many terrible ideas, Mr. Lampert may be getting out of his mansions a bit more, and spending his days in litigation. It should be a nice change for him.

    Featured image from Reuters.

  • Will Donald Trump Default on His $22-Trillion-Dollar Debt in 2019?

    Will Donald Trump Default on His $22-Trillion-Dollar Debt in 2019?

    President Donald Trump has had a history of credit defaults throughout his career. But could he be about to oversee the biggest one in history? Trump is sat on $22 trillion of debt with no outward signs that he has any control over it.

    The budget deficit is now at 3.9% of GDP and well above the 3.2% 40-year average. Although the $779 million deficit for the last fiscal year was below the Federal budget of $833 billion, it’s still huge by any standard.

    US Debt Ceiling

    The US debt ceiling is defined as the maximum borrowings permitted by the Federal government and is currently set at $20.7 trillion. As of Monday, October 15, the debt ceiling stood at $21.7 trillion.

    So how has Donald Trump managed to exceed the limit by $1,000 million? In February 2018 he suspended the debt ceiling which is basically a political fudge.

    It’s considered more acceptable to suspend the debt ceiling than increasing it or slashing the Federal budget to stay within the ceiling. Debt ceiling suspension isn’t a new phenomenon, though. Congress regularly shies away from accepting the inevitable.

    The Economy Is Booming so Why Is Debt Increasing?

    Almost all the data coming out shows the US economy is booming, so why is the national debt increasing? Donald Trump’s tax cuts have had a significant impact on Federal receipts. If you couple this with spending more than you receive, the debt must increase.

    Nations with debts that many consider unsustainable would normally see interest rates on government bonds rise sharply. Also, foreign exchange markets would look to switch to a more stable currency.

    With a GDP of $20 trillion, the US is still considered an economic powerhouse. It is responsible for a third of the world’s production. At present, the US dollar is considered a very strong currency. A downgrade by one of the credit rating agencies could quickly change that.

    Can the US trade its way out of debt? Not according to analyst “Sovereign Man” who worked out:

    “a financial model which shows that, even with absurd assumptions (7%+ GDP growth for years at a time, low interest rates, etc.), it is simply not feasible for the US government to ‘grow’ its way out of the debt.”

    Global Implications of a US Credit Default

    8.1% of Federal revenues currently go towards servicing the enormous debt and this figure is set to rise to over 20% before the end of the next decade.

    Interest rates have started to increase from historically low rates and are expected to reach 4.3% by 2024. Another problem facing the US is the relatively short maturity dates on treasury bonds compared with the EU and Asia.

    Donald Trump has previously gone on record as saying his corporate bankruptcies were strategic defaults to reduce debts. If he defaults on the $22 trillion US debt, there will be far-reaching consequences for the country and the global economy.

    Countries like China, Japan, and Brazil, would be worst affected as they hold more of the US debt than other nations. The impact would be far-reaching with global debt already at record levels.

    Some financial pundits would argue that a US debt default is very unlikely, but even they have to acknowledge the worrying signs are there.

    Featured image from Shutterstock.

  • Golden Nugget Casinos Owner Seeks Merger with Caesars Entertainment

    Golden Nugget Casinos Owner Seeks Merger with Caesars Entertainment

    In an exclusive scoop by Reuters, it has been reported that billionaire Golden Nugget Casinos owner Tilman Fertitta has approached Caesars Entertainment Corps to discuss a merger between the two companies.

    Fertitta has apparently reached out to the US casino operator Caesars Entertainment in regards to combining their empires in a reverse merger. Caesars Entertainment stock (CZR) jumped 10% on Wednesday as speculation of the merger mounted.

    Reverse Merger for Golden Nugget Casinos Owner

    The billionaire Golden Nugget Casinos owner also has holdings in the Houston Rockets NBA team and the Landry’s company that operates in the restaurant and entertainment sector. His other interests include Morton’s steakhouses, Bubba Gump Shrimp Company, and many more. The billionaire is worth a reported $4.5 billion by Forbes.

    Fertitta is pushing for a ‘reverse’ merger that would see Caesars acquire the Golden Nugget Casinos where the combination of shareholders of Caesars and private equity companies Apollo Global Management LLC and TPG Global would remain shareholders of the combined firms. The deal could be worth between $2 billion and $3 billion.

    The idea of the merger has been bouncing around for a week or so, positively affecting Caesars Entertainment stock prices. And if the merger is a success, it would see a vast slew of Fertitta’s restaurants and brands being opened in locations owned by Caesars.

    Caesars has a total of 49 casinos in various locations throughout the US, alongside another 13 in countries such as Canada, Egypt, the United Kingdom, and South Africa. The company currently has a market capitalization of $6.3 billion.

    Alternatively, the Golden Nugget Casinos owner has five casinos in the United States in locations that include Las Vegas, Atlantic City, Laughlin, Nevada, and Biloxi.

    If the two companies did merge, it would become one of the largest hospitality and casino companies on the planet. The plan is that Fertitta would become the chairman and also the majority shareholder of the new company.

    Does that sound like a backdoor takeover to you? Time will tell if the Golden Nuggets’ head honcho can pull off this multi-billion dollar deal of a lifetime.

    Featured image from Casino.org.

  • Journalists Uncover the Biggest Tax Fraud in Europe’s History

    Journalists Uncover the Biggest Tax Fraud in Europe’s History

    European media is flooded this morning with accounts of what looks to be the biggest tax fraud in Europe’s history. According to several European media outlets including Germany’s Die Zeit and Norway’s E24, banks and investors avoided paying taxes on hundreds of billions of European treasury bills and dividends.

    And the scandal isn’t restricted to one, or even two European countries. Denmark, Belgium, and Germany are thought to be the hardest hit. But the tax fraud extends all the way to Norway, Switzerland, the Netherlands, Spain, Italy, and France.

    Moreover, the tax avoidance scheme has been building up for a number of years, in what the media is dubbing, the “coup of the century.”

    Quoted in Die Zeit, Christoph Spengel, a tax law professional who had access to the incriminating evidence, said:

    “It’s about the biggest tax fraud in Europe’s history.”

    The tax scam is thought to have cost Denmark, Germany, France, Belgium, and Italy a total of $63 billion. For Denmark alone, that sum equals some 12.7 billion Danish kroner (around $2 billion) writes Politiken.

    Norway suffered losses of some 600,000 Norwegian kroner (around $73,000) however, according to Swedish news agency Di, after being warned by Danish authorities, was able to prevent 10 further fraud attempts totaling 380 million kroner ($46 million).

    It’s not yet certain how much money has disappeared from European treasury bills or the magnitude of the tax fraud that looks the be the century’s worst.

    Tax Fraud and a Corrupt Network of Global Banks

    SVT reported that many of the world’s largest banks are up to their necks in the largest tax scam of modern times. Deutsche Bank (which will surprise no one after their former traders were convicted of Libor rigging just yesterday) is among the names incriminated.

    UBS, BNP Paribas, Barclays, JPMorgan, Meryll Lynch, Banco Santander, and Morgan Stanley are all also said to be implicated. And Swedish bank SEB is on the hot list as well.

    SEB is accused of receiving some 70 million Swedish kroner ($7.8 million) for helping to conceal 1 billion Swedish kroner from the German treasury. According to Spengel:

    “If you realize you’re part of a criminal gang – and that’s the case here with SEB – it’s breaking the law.”

    The bank denies any criminal offenses, with German chief executive of SEB writing an email to SVT assuring them that the bank always operates in accordance with applicable laws and regulations.

    The CumEx Files

    A year in the making, the CumEx files are the culmination of a massive covert operation of 19 different media and journalists from 12 countries. More than 180,000 secret documents from financial institutions, banks, law firms, and German police investigation material were revised.

    “Cum-Ex” is Latin for “with” and “without,” which is meant to highlight the complicated short-term trading of stocks that sellers and buyers do not physically own. Because of its complex nature, ownership is very hard to pinpoint. Tax offenders in some cases declared that they had paid taxes abroad and even received tax refunds in their home countries.

    Initially, the idea behind the scam was to receive a double tax refund, however, in the most severe of cases, the same payment was made several times. Since regulations vary from country to country, the scheme was allowed to run unnoticed for several years.

    As a German senior advocate told Politiken:

    “It’s the perfect crime as this money machine has picked up huge cash sums. It’s as if you had looted Fort Knox, just better, because the source of the money was the treasury, and it’s outcast.”

    Featured image from Flickr.