Subsidy Fraud | Tax Evasion

Many companies, especially in agriculture, rely on subsidies. However, unscrupulous operators often claim these state funds without using them for the intended purpose, or relocate their business abroad after receiving support without repaying the subsidies. In such cases, subsidy fraud occurs under § 264 of the German Criminal Code (StGB), defined as, according to Wikipedia, “a fraudulent deception regarding subsidy-relevant facts toward the subsidy provider through false statements or certifications, or use of funds contrary to the purpose restrictions.”

 

Such perpetrators defraud not only the state, similar to money laundering, but also gain an unfair competitive advantage over rivals. To uncover these criminally relevant breaches of competition law, the experienced detectives of Kurtz Detective Agency Luxembourg and Trier are at your service: +49 651 2094 0060.

False Declarations | Misuse of Funds

Subsidy fraudsters often are legitimately entitled to some payments but submit false information regarding eligibility. For instance, in agriculture, they may falsify figures about livestock, cultivated areas, or investments. Our detectives in Luxembourg investigate and verify the correct figures through research and surveillance.

 

Another common scenario is the misuse of subsidies: funds intended for a specific purpose are diverted. For example, subsidies intended for employee training might be used for payroll, or for upgrading facilities instead of refurbishing pre-specified industrial sites. When fraud is proven—either by our detectives or by authorities—the funds must be repaid.

Subsidies Are a Complex Matter

Germany is among the countries that actively support businesses with subsidies (Luxembourg less so). These allocations are purpose-bound and aim to help companies stay competitive, explore new markets, adapt to changing economic conditions, or maintain conventional structures. In economics, subsidies can also include tax benefits and social benefits, though these are often not treated as subsidies in practice. Certain examples, such as tax incentives for Riester pensions, are considered subsidies.

 

The field of subsidies is therefore complex and often confusing for laypersons. Fraudsters exploit gaps to secure illicit gains. Kurtz Detective Agency Luxembourg and Trier works to reduce this “dark figure” of undetected subsidy fraud: kontakt@kurtz-detektei-luxemburg.com.

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Unfortunately, subsidy criteria often leave loopholes, allowing even questionable schemes to receive funding. For instance, some companies pursuing green electricity inadvertently increase CO2 emissions.

Example of Subsidy Fraud in Trier

Fraudsters are not limited to private companies; even authorities and institutional representatives have been implicated. A 2010 case involved the Trier Europe and Innovation Centre (EIC), a wholly owned subsidiary of the Chamber of Industry and Commerce and the Chamber of Crafts. The former EIC director Silke B. and ex-managing directors Lothar P. (IHK) and Josef A. (HWK) embezzled subsidy funds intended for businesses over several years. The total documented damage from more than 20 individual acts of subsidy fraud was approximately €500,000.

 

While Josef A. appeared as the mastermind, Silke B. and Lothar P. were partly executing agents, exerting significant pressure on staff to implement the fraudulent schemes. Employees, fearing job loss, submitted inflated timesheets to secure continuation of their temporary contracts. The victims included, among others, the German Federal Ministry of Finance and the European Union.

 

Kurtz Detective Agency Luxembourg and Trier offers professional investigations to uncover subsidy fraud, ensure accountability, and provide evidence for potential legal proceedings: kontakt@kurtz-detektei-luxemburg.com.