FRANKFURT, July 9 (Reuters) - Hanno Berger, a German accused of playing a key role in a years-long tax fraud, has been arrested in Switzerland where he had been living in exile, German and Swiss authorities said on Friday. The scandal, known as "cum-ex", is Germany"s biggest post-war fraud involving a share-trading scheme that the authorities say cost taxpayers billions of euros. According to the prosecutors, the scheme was promoted by Berger, a German tax inspector-turned-tax adviser, and others. Berger is a defendant in a case that is being tried in Wiesbaden, near Frankfurt. Berger, who is a lawyer and helped represent himself, has always denied any wrongdoing in conversations with Reuters and said what he did was within the law. Swiss authorities informed Frankfurt prosecutors of the arrest, the prosecutors" spokesman said on Friday. Berger was arrested in the Swiss canton of Grisons on July 7 based on an extradition request from Germany, the Swiss justice ministry said. His extradition is now pending a decision by Switzerland"s justice ministry, which can be further appealed to the Swiss Federal Criminal Court. "On the occasion of his interrogation, the person declared that he opposed extradition to Germany," the Federal Office of Justice said in an emailed statement. Kai Schaffelhuber, a lawyer for Berger, said his client was innocent and that he didn"t believe that extradition would succeed. "Switzerland isn"t dumb," he said. Berger was doing well under the circumstances, considering his high blood pressure, bad knees and age of 70, according to Schaffelhuber. BOGUS TAX REBATES The scheme involved trading stocks of major companies rapidly around a syndicate of banks, investors and hedge funds to give the impression of numerous owners, each entitled to a bogus tax rebate. The practice thrived between 2005 and 2012, a period that included the years after a financial crash and as banks were bailed out by the state. A loophole that fostered the trades was then closed. The cum-ex tax fraud is the subject of multiple investigations across Germany as the government tries to claw back billions in euros it said were stolen from the state. Last year, two British bankers were handed suspended jail terms and one a 14 million euro penalty in the first criminal convictions involving the scheme. The judge for that case, Roland Zickler, dubbed it "a collective case of thievery from state coffers".