Shrewsbury Road resident at centre of €55bn tax fraud investigation

While his name may not be entirely familiar to the residents of Shrewsbury Road, it's probably fair to say that high-flying investment banker Martin Shields has made his presence felt on Dublin's leafiest of thoroughfares since arriving there in 2012.

Having acquired 9 Shrewsbury Road from its previous owners, the Neary family, for €6 million, the Northern Ireland-born businessman and his wife, Francesca McWilliams, set about transforming the house, called Lissadell, over the course of the next several years, tripling it in size to its current footprint of 1,096sq m (11,800sq ft).

But while the denizens of Dublin 4 may have known little about Mr Shields up to now beyond his apparent penchant for an Edwardian-style property and a well-tended English garden, his involvement in a complex derivatives trading scheme while working in the City of London has propelled him to the centre of a major criminal trial in Germany.

According to a report in last Saturday's Guardian, Mr Shields (41) is one of two former bankers now on trial for 34 instances of serious tax fraud between 2006 and 2011.

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While the case has variously been described by French newspaper Le Monde as the "robbery of the century" and by Dutch media as "organised crime in pinstripe suits", the Banbridge-born banker sought to explain the so-called "cum-ex" scandal in more benign terms while giving evidence last week.

Mr Shields, a maths prodigy at school and engineering graduate of Oxford University, told the court of how he and his fellow scientists had been tasked by the banks that recruited them with maximising profits, with little or no regard for the legal consequences of their actions.

Commenting on the manner in which he and others had set about achieving this, he said: “One tool to achieve this goal was tax optimisation: avoiding taxation as far as possible – and taking advantage of any opportunities that could be found or created. This was not the clandestine approach of a few. Rather, I saw it as the clear and openly communicated expectation of most major banks and their customers.”

Quite apart from Mr Shields’ role in the scheme, it has been claimed the wider cum-ex scandal involved hundreds of individuals and companies across Europe.

Estimated losses amount to €31.8 billion in Germany, €17 billion in France, €4.5 billion in Italy, €1.7 billion in Denmark and €201 million in Belgium.

Mr Shields told the regional court in Bonn that “cum-ex trades” had been practised on an “industrial scale” in the first decade of the 21st century, and involved an extensive network of banks, companies and professionals such as lawyers and financial advisers.

His personal income was €12 million for the five years in which he worked with Gibraltar-based investment vehicle, Ballance Capital. He used part of that income to acquire both his Shrewsbury Road home and a £9.7 million mansion on Egerton Crescent in London's Chelsea district.

Mr Shields faces a potential 10-year prison sentence should he be convicted.

That term could be reduced however as a result of his decision to co-operate with the investigation, the Guardian said.