The then Finance Minister and current Chancellor Olaf Scholz (SPD) promised that companies should be helped “quickly and unbureaucratically” in the Corona crisis from 2020 onwards. That’s what happened – however, some fraudsters with criminal energy used the unbureaucratic, barely controlled procedures to collect high subsidies without being entitled to do so.
The criminal cleanup of these frauds is in full swing; 770 cases have been conducted so far by the Munich I public prosecutor’s office. Around 260 of these cases were ended with an indictment or a penalty order. This involved applied for grants amounting to 19 million euros, of which ten million were paid out. The public prosecutor’s office is currently conducting 160 investigations involving a requested 122 million euros, 57 million of which have been paid out.
Fraud was particularly easy at the beginning of the pandemic with so-called emergency aid – here, thorough checks should be expressly avoided in favor of quick payouts. In addition, the licensing authorities – mostly at the Chambers of Commerce and Industry (IHK) – first had to set up the necessary infrastructure.
In later aid packages – November aid, December aid, bridging aid I, II, III, III Plus and IV – the “auditing third party” was introduced as a new authority: the applications could only be submitted via tax advisors, auditors, sworn accountants and lawyers who were also the Check the plausibility of the information. As it now turns out, some “third party auditors” not only failed to fulfill this obligation – some of them even invented criminal schemes through which they made millions of dollars in profits for their clients and themselves.
The public prosecutor’s office has brought charges against a tax specialist and his wife. The man worked as an office manager in a large Munich tax consulting firm. There he was responsible for processing clients’ applications for Corona bridging aid. He then forwarded the applications to a tax advisor at the firm or to the business lawyer, who submitted the applications to the IHK, but without examining them further.
Under the guise of a company that was formally run by his wife as a “straw woman”, the man sold hygiene air filters to two of the law firm’s clients at completely inflated prices. He even deceived clients about his identity to conceal the fact that he was both an advisor and a salesman. He and his wife collected more than 1.6 million euros net, more than five times the actual market price.
But he wasn’t the only one who benefited financially from the transaction: the clients were able to include the purchases as “hygiene expenses” in their applications for bridging aid and received funding totaling more than 2.2 million euros.
The investigation leads into the rocker milieu and the red light scene
Four defendants in another case were sentenced two weeks ago by the Munich I Regional Court to prison terms of between two and a half and four and a half years: They ran companies in the catering and events industry and together founded another company that was supposedly supposed to sell hygiene products, hygiene-promoting conversions and training courses. But it didn’t do that, instead it set up a system of fictitious invoices that was used to obtain Corona aid without authorization. Around six million euros were applied for, and 1.8 million euros were paid out – but this was not used to maintain the company: two of the defendants each bought a Porsche from their share of the loot.
In a third case, the alleged main perpetrators are a tax advisor and a person from the rocker milieu with connections to the red light scene. Both have been in custody since March, among other things because they deliberately deleted correspondence. The tax advisor is also said to have said on the phone that prosecutors and employees of the IHK should have been blown up.
According to the well-known model, the two are said to have obtained Corona aid without authorization through inflated invoices – including for ventilation equipment that was needed to be able to quickly reopen one of the defendant’s sadomasochistic and brothel businesses. Around 85 million euros were applied for, including for other companies, of which 28 million were paid out. A date for the main hearing has not yet been set.