The whistleblower who exposed a massive tax scam

Summary

Business Daily — "The Whistleblower Who Exposed a Massive Tax Scam"

Host: Theo Leggett (BBC World Service)
Guest: Jaz Baines
Date: March 30, 2026

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Episode Overview

In this episode, Theo Leggett interviews Jaz Baines, a London-based corporate lawyer and high-flyer turned whistleblower. Baines exposed a €1.8 billion tax scam that siphoned money from the Danish treasury, orchestrated through complex financial trades. The conversation delves into his personal journey, the mechanics of the fraud, his motivations, and the immense personal and professional costs he faced — including a major civil lawsuit and lasting scrutiny.

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Key Discussion Points & Insights

1. Jaz Baines' Background and Career Path

• Started as a lawyer in London before moving into investment banking and eventually hedge funds.
• Recruited by Sanjay Shah, founder of Solo Capital, to help build its London office.
• Describes the culture as reminiscent of the “Wolf of Wall Street” with extravagant parties and luxurious perks.

“We'd be met in Dubai, a 20 foot limousine to take us to a very nice five or even six star hotel...there was a big party at the coup d'etat on top of the Bay Sands Marina Hotel. And yes, the bill ran into six figures.”
— Jaz Baines (01:29, 04:22)

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2. The Mechanics of the Scam: "CumEx" Trades

• Theo Leggett explains the "CumEx" (Comex) trading scheme: trading shares around dividend dates to create confusion over legal ownership, enabling multiple parties to claim tax refunds on taxes paid once.
• The loophole, exploited for more than 15 years across Europe, cost governments billions; Denmark was Solo Capital's main target.

“This creates confusion over who actually owns the shares ... And it enables both parties to apply for a refund of tax that's only been paid once.”
— Theo Leggett (06:08)

• Baines: At first, the trades seemed standard in the industry — “tax minimization” — but as the scale ballooned, he became uneasy.

“Once you've moved into billions, there's going to be a problem...I started to think along the lines of, this is a lot of money for a country with a population of 5 million people...that is less boxing schools, less doctors in hospitals, less policemen on the street.”
— Jaz Baines (07:28)

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3. Blowing the Whistle: How and Why

• Baines reached out to Danish tax lawyer Michael Amstrup, alerting him to hundreds of millions of euros in losses from Denmark’s treasury.
• With Amstrup’s intervention, Danish authorities became aware, but not before additional losses.

“You need to close your vault doors. International arbitrages are doing cum ex tax trades into your country and you're losing a lot of money...two years ago it was 100 million, last year it was 250 million and this year it's well over 1 billion. And he nearly did fall off his chair.”
— Jaz Baines (09:16)

• Danish police investigated Baines — including meetings in Hamburg — and cleared him of wrongdoing. Yet he found himself having to explain complex finance to investigators unfamiliar with such schemes.

“They didn't understand it. So I literally got to the stage — I had to sit down with a blank sheet of paper, start drawing diagrams...”
— Jaz Baines (11:23)

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4. Motives and Personal Repercussions

• Host asks if Baines' whistleblowing was motivated by a personal grievance with Shah.
• Baines insists he acted out of concern for the magnitude and impact of the fraud, not personal animosity.

“I had moved on...when I found out the numbers involved, I knew how it was going to end up. And that was my lawyer brain speaking to me there. If you're going to do tax trades into tens of millions, people will get upset ... going to a billion. You've attacked the nation.”
— Jaz Baines (12:52, 01:54)

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5. Lawsuits, Trials, and Official Outcomes

• Despite exoneration by Danish police and the UK’s National Crime Agency, Baines was among over 100 individuals targeted in a massive civil lawsuit by the Danish Tax Authority.
• The civil trial in London's High Court became the most expensive in British legal history (£400 million), ending with Denmark's defeat.

“It was the longest, most expensive trial in British history...the judge simply said, I see no evidence of fraud...to prove fraud in London, you need to...jump through a number of hoops...they barely jumped through any of them.”
— Jaz Baines (16:38)

• The judge said Denmark’s own controls were almost non-existent and that it hadn’t proven deception. However, he was critical of Baines personally, saying he was not a satisfactory witness and had “a wrong headed sense of grievance.”

(See also: 17:26, Theo Leggett)

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6. Reflection: Lessons and Final Thoughts

• The ordeal left Baines “jaded and worn out,” unsure if he’d make the same choices again.
• He warns that persecuting well-intentioned whistleblowers dissuades future cooperation with law enforcement.

“Playing boy scout doesn't really work in the real world...People won’t help a police officer again...even if it feels just sort of morally wrong...That was the biggest fear of the police in Denmark. Sadly, they were right.”
— Jaz Baines (18:26)

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Notable Quotes & Memorable Moments

• “If you're going to do tax trades into tens of millions, people will get upset. Hundreds of millions, it's going to be a political matter...you've attacked the nation.”
  — Jaz Baines (01:54, 12:52)
• “This is a lot of money for a country with a population of 5 million people...that directly hits their exchequer. That is less boxing schools, less doctors in hospitals, less policemen on the street.”
  — Jaz Baines (07:28)
• “Playing boy scout doesn't really work in the real world...People won’t help a police officer again...That was the biggest fear of the police in Denmark. Sadly, they were right.”
  — Jaz Baines (18:26)

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Key Timestamps

• 01:08 – Introduction to Jaz Baines, his background, and Solo Capital's lavish lifestyle
• 06:08 – Explanation of the CumEx tax scam
• 07:11 – Realization of the scam's scale and initial whistleblowing steps
• 09:16 – Meeting with Danish lawyer Michael Amstrup; authorities are alerted
• 10:12–12:33 – Danish police investigation; Baines explains the complex trades
• 12:52 – Baines on his motives for coming forward
• 15:04 – Civil case launched by the Danish Tax Authority against Baines and others
• 16:38 – Outcome of the London civil trial and judge’s criticism of Denmark’s case and Baines’ testimony
• 18:26 – Baines reflects on whistleblowing and consequences for future disclosures

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Takeaways

• The scale and audacity of modern financial schemes can deeply undermine national finances.
• Whistleblowers in high finance face immense personal, professional, and legal risks—sometimes, even when cleared by authorities.
• Complex legal environments mean even well-intentioned actions can have unpredictable personal costs.
• The saga raises questions about the effectiveness of tax authority controls, the justice system's handling of such cases, and the broader chilling effect on ethical whistleblowing in finance.

Transcript

[Theo Leggett]

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[Theo Leggett]

Hello and welcome to Business Daily. I'm Theo Leggatt. In today's program, we'll meet a man who blew the whistle on a 1.8 billion euro tax scam, but ended up paying a very heavy price. Jazz Banes was once a high flyer in London's financial industry. Who knew what it was like to indulge in Wolf of Wall street style excess.

[Jaz Baines]

We'd be met in Dubai, a 20 foot limousine to take us to a very nice five or even six star hotel on one of the Singapore Grand Prix weekends. There was a big party at the coup d' etat on top of the Bay Sands Marina Hotel. And yes, the bill ran into six figures.

[Theo Leggett]

But when he realised his former boss was making a fortune at the expense of European taxpayers, he says he felt he had no option but to intervene.

[Jaz Baines]

I knew how it was going to end up. If you're going to do tax trades into tens of millions, people will get upset. Hundreds of millions. It's going to be a political matter going to a billion. You've attacked a nation.

[Theo Leggett]

That decision cost him his livelihood and left him on the wrong end of a major lawsuit. Listen on to hear his story. So let me introduce you to Jaz Baines, the man who found himself at the centre of a legal and financial hurricane. He's mild mannered, late 40s, quietly spoken and neat. It's easy to imagine him as a corporate lawyer making very good money from crunching complicated numbers. And to begin with, that's exactly what he was.

[Jaz Baines]

Well, I started my career in year 2000 as a lawyer in a very major law firm based in central London. Worked there for a few years and then moved into investment banking. And then one day 2010, I got a call from Sanjay Shah's Immediate deputy. And he said, look, we'd like to hire somebody new to help us build an office. I was intrigued enough to go along and I met Sanjay Shah over a drink and he was a fascinating character. So that was my movement from law into banking, into the hedge fund world.

[Theo Leggett]

Now that mention of Sanjay Shah is important. Today, Mr. Shah is a convicted criminal serving a 12 year sentence in a Danish prison for tax fraud. But back in 2010, he was an ambitious financier who'd recently set up his own hedge fund, Solo Capital. And that was where Jaz Baines ended up working.

[Jaz Baines]

Just for those who don't know, hedge fund is a specialized financial institution. Very high risk, but also very high reward. When people hear about sort of mega fortunes we've made in the city, it's probably with people who are running hedge funds. Sanjay had a very good first year. He'd done very well. Whether it was just luck or combination of luck and some dollop of genius, I don't know. He'd done well and he had enough money to say, look, we can hire somebody like you. And I was persuaded to take a shot at it because I was offered the chance to run a business and, and this was the next sort of stage of my career. I'd been a lawyer for many years, I'd been an investment banker for many years. This is my chance to be a manager and build a business. It just happened to be a business in the finance space.

[Theo Leggett]

Jaz was brought in to run Solo Capital's London office while his boss set up another operation in Dubai. Business was good, the money came rolling in and the staff, well, they were enjoying the high life.

[Jaz Baines]

We were doing very well as a business and Sanjay did like to enjoy himself. We'd be met in Dubai, a 20 foot limousine to take us to a very nice five or even six star hotel. Sanjay had a fascination for Formula One, so we'd often go to things like the Abu Dhabi Grand Prix or the Las Vegas Grand Prix or Singapore Grand Prix. I think it was a Monte Carlo Grand Prix one year as well. I didn't go. There would always be super duper exclusive vip, Ferrari lounge passes and that kind of stuff with passes in the evening. On one of the Singapore Grand Prix weekends, there was a big party at the Coup d' Etat Bar on top of the Bay Sands Marina Hotel. Very exclusive, well known, iconic hotel. And yes, the bill ran into six figures.

[Theo Leggett]

All of this, as I mentioned before, has echoes of the Wolf of Wall street, the 2013 film about financial industry excess, except that to Begin with Jaz insists they weren't doing anything wrong.

[Jaz Baines]

When I moved in it was doing brokerage work, securities lending work and some trading. By early 2013, some of these tax based transactions were happening in Dubai, to be fair, with a minor crossover into the London office. So I was aware of them. It didn't affect the London profit and loss accounts, it didn't affect the London profitability. So I was just aware they were going on and let them do their tax based trades out of Dubai and there was a whole separate team doing that kind of work in Dubai. In itself that didn't worry me. I'm well aware that every financial institution in the city of London has some kind of tax team minimizing tax or doing some kind of trade with a tax element to it.

[Theo Leggett]

But this is where things began to get very murky and it's where I have to introduce you to a neat little trading trick known as Comex. When a company makes a profit, it can decide to return some of that money to shareholders through a payment known as a dividend. In many countries, that dividend is taxed at source, but the shareholder can often claim a rebate if they live abroad. For example now with Comex, a share is sold from one investor to another immediately before the payment of a dividend, but delivered afterwards. This creates confusion over who actually owns the shares at the moment when the dividend is paid. And it enables both parties to apply for a refund of tax that's only been paid once. It's a loophole that was ruthlessly exploited by traders in Europe over at least a decade and a half and cost taxpayers billions. Initially, Germany was the main target, but the practice spread to other countries including France, Belgium and Austria. For Solo Capital, the target was Denmark.

[Jaz Baines]

These were tax erosive trades with which is another way of saying that money was leaving the Danish treasury and heading towards Sanjay Shah's Ferrari collection in Dubai.

[Theo Leggett]

By mid 2014, Jas Baines had left Solo for a competitor, but was hearing some remarkable gossip about his former employer.

[Jaz Baines]

Over the next six to nine months, maybe four, possibly five separate people, did mention that Sanjay had moved from doing trades around 100 million euros into Denmark to 250 million euros into Denmark to over a billion. I actually in principle don't have any objection to tax based financing work, long as it's all legitimate and it's been approved by lawyers and the right people have signed off and said it works. This is the game of cat and mouse people have played with tax agencies since tax agencies were first Set up. I did have an objection to the quantum. Once you've moved into billions, there's going to be a problem. The new hedge fund I'd moved to also saw these trades, also thought these were legitimate trades technically from a legal perspective. And they were also doing the trades separately. Sanjay's two former deputies had set up on their own to do the same trades in Dubai. I saw a colossal mess coming down the line and I thought, if I don't de escalate this now, it will be it's going to implode or explode, whichever word you like, on its own accord. I'd stop thinking about this amount of money as tax trades. And I'd started to think along the lines of, this is a lot of money for a country with a population of 5 million people that's half the size of London and that directly hits their exchequer. I mean, that is less boxing schools, less doctors in hospitals, less policemen on the street. A country of that size, I thought it had gone too far. So I took some proactive action.

[Theo Leggett]

But just how do you go about blowing the whistle on something as big as this? He began, he says, by getting in touch with a well connected Danish lawyer called Michael Amstrup.

[Jaz Baines]

He was a senior, very senior tax lawyer in a very prominent law firm in Denmark. Gave him a call and said, my name's Jaz Baines, I live in London, I'd like to meet you if that's okay. And he said, sure. And he kindly flew out to Heathrow Airport. We sat down at Heathrow and I explained to him, you've got huge holes in your treasury. You need to close your vault doors. International arbitrages are doing come ex tax trades into your country and you're losing a lot of money. He started to take some notes and asked about the numbers. I said, well, two years ago it was 100 million, last year it was 250 million and this year it's well over 1 billion. And he nearly did fall off his chair. And he did take some strong action very quickly. He reported this to the Danish authorities. They logged the call and then carried on, paying out, to my understanding, a further 300 million euro over the next four to six weeks. And then they did stop, which is a good thing, I guess.

[Theo Leggett]

And then the police got involved.

[Jaz Baines]

Yes, well, Michael did call me and said, look, I've got a bit of a problem. I've got half the Danish police force camped outside my law firm. I said, I don't want to get involved. I did what I did with good Intentions. I haven't done anything wrong myself. I want to move on. Best of luck to everyone in Denmark. But he called me several times over the next week to two weeks, and by the end he was clearly under huge pressure. And this time he said he's got most of the Danish police force outside of his home. And I thought, right, he's going to break anyway. I might as well speak to the police. He was with the police one day when he called me and he said, look, the police have to be very clear on one thing. There is no such concept as immunity under Danish tax law or Danish law as such, if you've done something wrong, you know they're going to have to charge you. And I said, no, that's fine. I don't think I've done anything wrong and I'm sure they'll see that. So I did meet with the Danish police with that warning. So I met them, I think it was actually in Hamburg a week or two later. We met at a nice hotel, we sat down, we talked for several hours. They did say, look, we're going to have to investigate you because this is the biggest story in Denmark right now. Every newspaper, radio station, TV program, magazine is talking about this. It's discussed by every Danish citizen in the country. And we feel there's been a crime here. I said, I can imagine that. It was always my concern when this did blow up at that kind of level, people would scream criminality and fraud and crime. So I was investigated about two months. I gave them everything they needed and my accounts answered all their questions. And then they very gladly said, look, we're comfortable, you've done nothing wrong. I thought, great. I shook hands, I was about to move on. They said, can we ask you for your help? Because we don't really know what the heck happened here. What seems obvious to me, I, I to maybe somebody, you know, in the, in the high, high finance world of London, I've got used to some of these transactions and the maths and economics and the law and regulations involved. But of course, to the outsider, it's a complete spider's web. They didn't understand it. So I literally got to the stage. I had to sit down with a blank sheet of paper, start drawing diagrams, start showing them how the money movements had happened. It was complicated, but it took two years on and off, and I helped them. And I thought, well, I'm in for a penny, in for a pound, I might as well finish what I started.

[Theo Leggett]

It is possible to question Jazz Bain's motives here. He was, after all, the top lawyer at Solo Capital. He knew how tax trades were structured and by the time he blew the whistle on the Comex trades, he'd had a serious falling out with his former boss over money. So I asked him if he'd acted out of personal grievance.

[Jaz Baines]

Oh, actually, no. I mean, it didn't make sense for it to be a personal grievance. I had moved on. I didn't like the way Sanjay Nesary did things. I think the money turned his mind. But, you know, I'd moved on. I was working at a competitor. I was earning what most people in London even would consider very good money and moving forward with my life. I think when I found out the numbers involved, I knew how it was going to end up. And that was my lawyer brain speaking to me there. If you're going to do tax trades into tens of millions, people will get upset. Hundreds of millions. It's going to be a political matter going to a billion. You've attacked the nation. And I knew how this would be perceived.

[Theo Leggett]

You're listening to Business Daily on the BBC World Service.

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[Theo Leggett]

In today's program, we're hearing from Jaz Baines, a man who blew the whistle on a major financial scandal and lost his livelihood as a result, Jaz was not prosecuted by the Danish police and Britain's national crime Agency also decided he had no case to answer. Unfortunately for him, however, the Danish Tax authority took a very different view and it wanted its money back.

[Jaz Baines]

Six months later, I got hit with a 1.4 billion sterling tax fraud case by the Kingdom of Denmark. Who said, we consider you to be a fraudster. We're coming after you and everything you've ever made in your time at Solar Capital belongs to us. And I was one of 105, 110 people who were being sued. I wasn't very happy. So I did contact the Danish police. I mean, I had the home phone numbers of several of the most senior police officers. You know, I said, what on earth is this? The consistent story was, look, you just caught up with this because your name's on so many documents, they will let you out, they won't be so foolish as to sue you. They are aware that you helped us out. But this went on for just too many years, Theo, and slowly but surely it throttled my career in central London. I mean, there's not much you can do when you have close to a $2 billion international tax fraud suit hanging over you. People ask questions.

[Theo Leggett]

By this time, prosecutors had already closed in on Sanjay Shah, the man at the centre of the Danish trades. He was extradited to Denmark in December 2023, and after a lengthy criminal trial, he was found guilty of fraud and sentenced to 12 years in jail. It was the longest sentence for a financial crime in Danish history, though his lawyers immediately said they would appeal. Meanwhile, back in London, the mammoth civil trial involving Jaz Baines and so many others finally got underway in April 2024. For a year and a day, teams of lawyers pored over the evidence while doing battle in London's High Court. And then, months later, the verdict. The Danish Tax Authority lost badly.

[Jaz Baines]

It was the longest, most expensive trial in British history. I think the final bill that the numbers I heard were 400 million sterling. So you got half a billion euros spent on lawyers. It's utterly insane. And the judge simply said, I see no evidence of fraud, because to prove fraud in London, you need to go through a number of steps, jump through a number of hoops. I think six at least, and they barely jumped through any of them. They'd simply said, we shouldn't have paid out. These people are bad people. Can you pay us the money back? It was an incredibly naive case to have brought. And the judge, as far as I can tell, and clearly my view is biased, he simply just followed the rules. He simply looked at the rules of fraud and said, right, well, you have to satisfy these six criteria. And they didn't even get satisfied for Sanjay Shah, let alone the other people who were there at the time.

[Theo Leggett]

Although the judge ruled that Sanjay Shah had been dishonest and that there was evidence of substantial greed among other defendants. He said Denmark's own controls on tax refunds had been so flimsy as to be almost non existent. The tax authority, he added, had failed to prove it was deceived into paying refunds it would not otherwise have paid and so its claims were thrown out. It's important to mention here that Jaz Baines did not escape criticism himself. The judge said he didn't find him very satisfactory as a witness and that his evidence contained a number of inventions that were, he wrote, frankly, a bit shameless and embarrassing. He went on to suggest that jazz was heavily influenced by a strong desire to deflect possible blame and that he had a wrong headed sense of grievance about being involved in the lawsuit. Nonetheless, the threat of financial ruin was lifted and years of legal limbo were over. I asked Jaz whether if he had his time again, he would act in the same way.

[Jaz Baines]

This is a very difficult question, Theo. I'm slightly jaded and worn out with my time in the city. As you can see. I've tried to by and large follow the rules and do things honestly. And unfortunately, playing boy Scout doesn't really work in the real world. I think that's the unfortunate lesson from this. And one of the biggest reasons that the Danish police tried so hard to extricate me from the trial was the they didn't want this story coming out. You know, people won't help a police officer again. They won't see something that feels just sort of morally wrong, even if it's not legally wrong, and speak up. And that was the biggest fear of the police in Denmark. And sadly they were right. I think as people hear this story, they'll say, future, walk on by.

[Theo Leggett]

And I was speaking there to Jaz Baines, the man who blew the whistle on a 1.8 billion billion euro tax scam, but ended up being sued for damages. That's it for this special edition of Business Daily. I'm Theo Leggett. Thank you for listening.

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