Second Circuit Panel Hears SKAT Revenue Rule Defense Argument in $2.1B Fraud Appeal

Judges question applicability of “revenue rule” in $2.1 billion fraud appeal following SKAT’s $500 million jury verdict

Highlights

A panel of Second Circuit judges heard arguments and questioned how the case fits within the common law “revenue rule.”
The appeal follows a February 2025 sweeping victory for SKAT in a bellwether jury trial, resulting in a $500 million award tied to a $2.1 billion fraud scheme.
Marc Weinstein reinforced SKAT’s claims are grounded in fraud and related causes of action – not the enforcement of Danish tax law.

Hughes Hubbard is continuing its representation of the Customs and Tax Administration of the Kingdom of Denmark, or Skatteforvaltningen (SKAT), in ongoing appellate proceedings before the U.S. Court of Appeals for the Second Circuit arising from a $2.1 billion fraud scheme.

During oral arguments on May 13, a panel of Second Circuit judges questioned the appellant on its position that SKAT’s claims against certain U.S. investors should be barred by the common law “revenue rule,” which generally prohibits one sovereign from enforcing its tax laws in the courts of another.

The appeal follows a February 2025 sweeping victory for SKAT in a bellwether jury trial, where it was awarded $500 million as part of its efforts to recover $2.1 billion from a fraud scheme related to fraudulently claiming refunds on tax withheld from stock dividends.

The defendants argued that SKAT’s claims are barred by the revenue rule because they seek to recover foreign tax losses.

Marc Weinstein, arguing on behalf of SKAT, reinforced that the authority’s claims are grounded in fraud and related causes of action, not the enforcement of Danish tax law. He explained that the scheme involved thousands of sham applications falsely representing ownership of Danish shares to obtain refunds of taxes that had never been owed.

Bloomberg Law reported on the arguments.

In September 2025, SKAT won a $165 million bench trial on competing claims of a settlement agreement, which followed multiple settlement agreements with U.S. defendants.

Weinstein, Bill Maguire, Neil Oxford and Dustin Smith are leading the Hughes Hubbard team representing SKAT, with key assistance from John McGoey, Greg Farrell, Kiran Rosenkilde, Elizabeth Zhou and Richard Bosch.