Andreas Schmid, the former CEO of the German private media fund VIP Medienfonds, was sentenced to six years imprisonment for tax evasion by a Munich court on Tuesday morning (Nov 13).

VIP's managing director Andreas Grosch, who had suddenly exited his post from the beleaguered fund in June 2006, was given a two-year suspended sentence.

Pronouncing the judgement, the judge Huberta Knöringer declared that 'both of the accused knew that the statements in the tax returns were false.'

VIP's fall of grace from its stellar career as the self-professed leading German media fund with involvement in such films as Monster, Black Book, Trade and Perfume: Story Of A Murderer, began at the end of September when Schmid was taken into detention at Munich's Stadelheim Prison on allegations of tax evasion.

He had been held in detention there for the past two years, including during the court case at the Munich Regional Court, which lasted more than seven months this year.

Schmid could now be set free from detention on payment of a bail amounting to Euros 4m and according to other conditions until the sentence becomes final. His defence lawyers have already indicated that they will appeal against the verdict.

According to Focus Online, the VIP case is considered to have been Germany's biggest on tax evasion, the loss to the German fiscal authorities around Euros 250m. Meanwhile, 11,000 investors in VIP Medienfonds 3 have had their 'tax advantage' disallowed and will now be required to pay substantial back taxes.