Was reading in a book by a former SS man that the Soviet 76.2mm anti-tank gun was actually developed in Germany but rejected by the German army in favor of the 3.7 cm doorknocker.  The design was then sold to the Soviets.  Anyone else heart this and is this just BS?

Lots of quiet cooperation between the USSR & early Nazi Germany prior to 1941.  The Luftwaffe did a lot of training very quietly in the inter-war years in the Soviet Union.

Was the Pak40 the result when the Germans realized the 37mm was useless against medium tanks?

The Germans had the 3,7cm PaK 36, then had the 5cm PaK 38, and the 7,5cm PaK 40....so the 50mm was the interim step between the two...

Armor development far outpaced the AT development...and the 37mm AT gun was ok in the beginning of the war, most countries had some sort of 37mm AT gun...

Don't forget they were still issuing AT rifles, in rifle calibers, in the 30's....the Poles, and Germans both had 7.92mm AT rifles....

The Germans loved the Soviet 76.2mm, and turned them against the former owners whenever possible...one of the Marder AT vehicles was equipped with the Crash Boom....

Would this guy have had any expertise in the area to be a reliable witness?  Did he work in a Nazi design/purchasing bureau, or was this soldier scuttlebutt?

"Hey I heard a rumor..."

Nah, the guy was a SS private and a Belgian at that.  

I've never heard that story before and I think it is unlikely.  It's just that I'm not expert on Soviet artillery.  I've more stuff on German ordnance.

Yep.  Armor trained there too.   Lots of German influence on Soviet aircraft and armored vehicles.  Krauts got a secret place to violate Versailles Treaty & Sovs got exposure to German tech.

Plus the Germans paid in gold which the USSR desperately needed as the Russian currency carried no value to the rest of the world.  .

What book?