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Police bust massive property fraud scheme

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Police bust massive property fraud scheme
Photo: DPA
08:05 CET+01:00
German police have carried out a string of busts against a network of companies alleged to have stolen more than €100 million from would-be real estate investors, prosecutors in Frankfurt said.

"About 1,200 investigators and 15 prosecutors carried out 130 searches and seized assets worth more than €100 million, as well as issued arrest warrants against the six allegedly responsible, aged between 33 and 70," the prosecutor's office said in a statement released late on Tuesday.

The sums swindled involved reached hundreds of millions of euros, the office said.

The operation was carried out across seven regional states, including Hamburg and Bavaria, and 50 people are suspected of involvement.

The prosecutors said police had been investigating a Frankfurt-based company since mid-2012, which the German news agency DPA identified as real estate firm S&K Sachwert.

The company is alleged to have partnered with hundreds of other firms as part of a Ponzi-style fraud scheme, a style of financial subterfuge made famous by US investor Bernard Madoff at the height of the financial crisis.

According to media reports, the company promised investors 12 percent profits on real estate investments, which were then diverted to finance the lavish lifestyles of company executives or pay back the first wave of investment victims.

AFP/mry

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