Extent of Damage not yet Foreseeable
In view of the fact that investigations usually last several months, no definitive figures are yet available on the level of injury suffered to date. In addition, new indications of further suspicious cases are being received daily. While the damage in Berlin, for example, was estimated at €200,000 at the beginning of April, the senior public prosecutor’s office reported measures to secure assets of up to €4 million by the end of May. In North Rhine-Westphalia alone, the damage caused by fake sites (more on this below) was estimated at over €227,000 in 11 cases. The number of unreported cases nationwide is much higher.
However, it must be taken into account that the figures, which at first glance appear very high, must be put into perspective. For example, the nationwide total amount of approved immediate aid for solo self-employed persons, freelancers and small companies with up to ten employees was 13.1 billion euros. It should also be emphasised that a large number of recipients have already voluntarily repaid grants received.
Number of Cases difficult to Determine due to long Duration of Proceedings
It is difficult to quantify not only the damage caused but also the number of cases of fraud. Due to the ongoing investigations, it is not possible to specify this. Nationwide there were 2200 suspected cases of fraud at the end of May. While this number indicates the potential extent, the limited informative value must be taken into account. For example, the figure does not cover cases in NRW, as the State Office of Criminal Investigation has not yet provided figures for this. Furthermore, it should be noted that a suspicious case is only a suspicion of a criminal offence and not an actual fraud offence.
In NRW, for example, at the end of the evaluation, around 9,000 reports received relating to fake pages led to only 11 cases of criminal liability for fraud. Finally, it must also be taken into account that there is a strong divergence between the extent of suspected cases in the different federal states.
The methods of obtaining coronavirus support funds without authorisation are manifold and vary from case to case. For example, false information about the financial situation can be given or money is claimed for companies that do not (any longer) exist or have been insolvent for some time. Also, funds are sometimes requested for external companies, while the own account details are given. Frequently the aid is not used according to the specifications or is applied for several times.
While the criminal consequences of such behaviour are often underestimated, substantial fines or even imprisonment can be expected from such coronavirus support funds fraud cases. The sanctions that may be imposed depend on the circumstances of the individual case. Possible offences include money laundering, subsidy fraud, falsification of evidence-relevant data or data spying.
Subsidy fraud § 264 StGB:
- furnishes an authority which is competent to approve a subsidy or another agency or person involved in the subsidy procedure (subsidy giver), for themselves or another person, with incorrect or incomplete particulars regarding facts which are advantageous for themselves or the other person, such particulars being relevant for the granting of a subsidy,
- uses an object or cash benefit the use of which is restricted by legal provisions or by the subsidy giver in relation to a subsidy contrary to that restriction,
- withholds from the subsidy giver, contrary to the legal provisions relating to grants of subsidies, facts relevant to the subsidy or
- uses a certificate of entitlement to a subsidy or about facts relevant to a subsidy which was obtained by furnishing incorrect or incomplete particulars in a subsidy procedure
- incurs a penalty of imprisonment for a term not exceeding five years or a fine.
It should be emphasized that subsidy fraud is an abstract offence of endangerment. This means that it is not necessary that an error was actually made or that a subsidy was paid out to which no entitlement exists. The fulfilment of the above-mentioned elements of the offence already constitutes the basis of the penalty.
Furthermore, it must be considered that subsidy fraud can also be committed by omission. This may be the case, for example, if considerable facts are concealed.
According to § 264 (6) StGB, criminal liability can be waived if the offender voluntarily prevents the grant of the subsidy. It is therefore advisable to try to get back down to the bottom of the legal system as early as possible in order to avoid serious consequences.
Coronavirus support funds are often applied for intentionally and abusively. However, it can also happen that mistakes have been made in the application without bad intent. If this is the case with you, you must react quickly to avert serious consequences. This is particularly the case because it is generally sufficient for the information to be objectively incorrect. It is therefore irrelevant whether you were aware of this or not. Nevertheless, the accusation of fraudulent obtaining of subsidies does not always succeed with the police and the public prosecutor’s office.
Subsidy fraud is a complicated criminal law norm, which requires outstanding legal knowledge to understand. Our team of specialized commercial defense attorneys will review your case and then inform you about the legal viability of the allegation and advise you on the appropriate defense options.
How is Subsidy Fraud punished?
Subsidy fraud is punishable by a fine or imprisonment for up to five years. In particularly serious cases even up to ten years. In the context of Coronavirus support funds, the acceptance of a “particularly serious case” should not be underestimated. Such a case exists, among other things, if the perpetrator obtains an unjustified subsidy of a large extent for gross self-interest or by using counterfeit or falsified evidence for themselves or another (§ 264 para. 2 no. 1 StGB). Even if an amount of € 9,000 does not give the appearance of a “large amount”, the Federal Court of Justice has emphasised that such an amount cannot be determined (BGH, 1 StR 235/14).
Rather, it depends on the overall circumstances of the case, whereby the emergency situation of the COVID-19 coronavirus crisis should also be taken into account. Nevertheless, a good defence can achieve, given the appropriate facts, that a first-time offender gets away with a fine. This is particularly the case when only reckless action was taken. In this case the early involvement of a lawyer is essential!
Please also note that you will have to repay any amounts illegally received. This should not only serve as a deterrent, but also take away the motivation of those who assume that the subsidy fraud is still “worthwhile” despite an imposed fine.
How will the Fraud be Detected?
If not always immediately and not in every case, fraud is often detected sooner or later. It is therefore not advisable to hope that false information in the subsidy application will remain undetected. The granting authorities (usually the development banks of the federal states) usually quickly become aware of discrepancies in the application. On the basis of the data provided, conclusions about your identity are possible.
In other cases, the authorities are alerted to suspicious behaviour by external actors. For example, the applicant’s bank may report to the authorities that the applicant was already insolvent long before the coronavirus crisis and may therefore not be entitled to receive aid funds. The banks usually notice suddenly incoming amounts of this magnitude (approx. € 9000 per applicant) and often even file criminal charges themselves. It is also suspicious when a large sum of money is received in the account of a minor or a person who has been drawing Hartz IV benefits for a long time.
The Central Office for Financial Transaction Investigations (FIU) plays an important role in the detection of subsidy fraud. This is part of the German customs and is sometimes responsible for the prevention, detection and combating of money laundering. If a bank finds a transaction suspicious, it submits it to the FIU. The central office then checks whether there is a connection with the coronavirus support funds. If there is one, the case is forwarded to the relevant law enforcement authority.
However, information from neighbors that indicate unauthorized assistance also contributes to the clarification. In the course of their investigations, they may also search properties and secure assets. In this context, it should be emphasized once again that a quick reaction can protect you from such serious interference. If you have made incorrect applications, are not entitled to the subsidies you have received, or if you have not used the funds properly, you should not wait until the public prosecutor’s office takes these measures. Get in touch with a lawyer in good time so that you can get out of the matter with the least damage!
Fake Sites and Phishing Mails
Cases are becoming more and more frequent in which attempts have been made to obtain data through Internet or telephone fraud in order to use it to apply for aid funds. The fraud was often carried out by means of so-called fake sites. These imitate official websites in order to give the deceived persons the impression that they are state platforms. Due to this deception, the relevant data is then revealed, which was used by the fraudsters to apply for aid for their own benefit. These fake sites are usually hosted abroad. At the end of May, the authorities had uncovered and blocked 18 sites in over 8 federal states.
Frequently, fake e-mails (phishing e-mails) were also used to obtain financial data. In other cases, it was claimed that it was a development bank which demanded the repayment of allegedly paid subsidies.
If you have entered your data on such a page or even made payments, you should seek legal assistance as soon as possible. Our specialist lawyers are familiar with these scams and will help you to defend yourself against them!
How do the Authorities React?
When the first cases became known, the authorities reacted with numerous attempts to rectify the situation. The use of special investigation teams should lead to fewer cases of fraud. Furthermore, the audit procedure has been expanded in many countries and the number of random checks has been increased.
In the fight against subsidy fraud, fake sites have also been published by the police and licensing authorities to warn against the fraudsters. Many of the sites have now been blocked. In many cases, the authorities have succeeded in seizing money paid out.
Have you been accused of fraud on the basis of allegedly taking advantage of coronavirus support funds? Have criminal investigations already been initiated? To avoid adverse consequences, you should seek legal assistance as soon as possible. There are often cases where the situation has got out of hand. Even if you think you find yourself in a hopeless situation, our criminal defence lawyers often recognise possibilities to avert your punishment or to reduce it to a minimum. For this purpose, a comprehensive review of your case and a well-developed defence is essential.
If no charges have yet been brought, but you fear that one is imminent, early involvement of a lawyer can determine the outcome. Our defence lawyers are at your disposal, please contact our law firm directly.
If you have become the victim of a fraud scam, our specialized attorneys will help you to successfully defend yourself against your rights violation. Simply use the form below to contact us. Our lawyers look forward to working with you.