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A defendant in a German court case said on Monday the way Deutsche Bank set itself up for emissions trading left the door open for tax evasion, while the bank said there was no evidence of wrongdoing by its employees.

The trial started last week at a Frankfurt district court and is scheduled to run until at least March 2012.

Six men, aged 27 to 65, are accused of having conspired to evade more than 230 million euros ($331 million) in value added tax (VAT) between September 2009 and April 2010.

In an EU-wide investigation, Germany has carried out the biggest swoop on suspects, with prosecutors identifying around 170 suspects, including seven who work for Germany’s biggest bank.

One of the first six to stand trial, none of whom work for Deutsche, a 35-year-old defendant named Bjoern P. told the court that he suspected that when Deutsche Bank organised itself for emissions trading, the potential for tax evasion was clear.

Deutsche did not seem to want to know and instead hid behind its risk management, Bjoern P. told the court.

Judge Martin Bach said he would focus on whether Deutsche Bank employees could have known the risks of wrongdoing by carbon traders when it made finances available for the EU scheme.

Deutsche has said the bank itself is not subject to investigation and that it hopes its staff will be cleared.

A bank spokesman said a study by lawyers Clifford Chance had yielded no evidence of wrongdoing on the part of Deutsche Bank employees.

“We remain of the opinion that Deutsche Bank did not cause any fiscal damage, and therefore should not bear any consequences,” the spokesman said.

The six men — who are from Germany, France and Britain — face possible prison terms of up to nine years.

Lead prosecutor Thomas Gonder is negotiating cooperation deals with four of the six, the court heard.

The alleged fraud being investigated involves buyers importing carbon permits in one EU country without paying VAT and selling them in another, adding tax to the price and pocketing the difference.

So-called VAT carousel fraud has happened in other markets.

The six standing trial on Monday had been remanded in custody.

Bjoern P. said he initially did not understand the difficult nature of carbon trading. He nevertheless accepted an annual salary of 180,000 Swiss francs and a one million euro bonus.

He passed carbon exchanges’ trader exams shortly before the swoop in April 2010.

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