Germany uncovers multi-million euro pyramid fraud scheme

FRANKFURT Tue Feb 19, 2013 11:15pm IST

A banner featuring a Euro coin is seen at the European Commission headquarters building in Brussels October 18, 2012. REUTERS/Yves Herman/Files

A banner featuring a Euro coin is seen at the European Commission headquarters building in Brussels October 18, 2012.

Credit: Reuters/Yves Herman/Files

Related Topics

Polluted waters of China

Polluted waters of China

Growing cities, overuse of fertilizers, and factory wastewater have degraded China's water supplies to the extent that half the nation's rivers and lakes are severely polluted.  Slideshow 

FRANKFURT (Reuters) - Frankfurt prosecutors on Tuesday said they are investigating two companies based in Hamburg and Frankfurt on suspicion of involvement in a multi-million euro investor fraud scheme.

Around 1,200 investigators searched premises in the federal states of Hesse, Bavaria and Hamburg and six suspects were arrested, the prosecutor said in a statement. Around 50 people are under investigation, the prosecutor said.

The prosecutor's office declined to name the companies or the people involved.

A person close to the investigation said one of the companies was real estate group Deutsche S&K Sachwert AG in Frankfurt and the other was Hamburg-based United Investors Treuhand.

S&K did not respond to requests for comment. United Investors Treuhand also did not respond to requests for comment.

The scheme involved the fraudulent acquisition of investor funds as part of a so-called "snowball investment scheme," the Frankfurt prosecutor said, using the German term for a pyramid scheme.

The mismanaged funds served to support an "extremely excessive lifestyle" on the part of the accused, the prosecutor said. Investor funds were transferred to companies controlled by the accused managers and to their family members.

(Reporting By Edward Taylor, Arno Schuetze and Jonathan Gould; Editing by Martin Zwiebelberg and Jane Merriman)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Infrastructure

REUTERS SHOWCASE

Big Infra Deal

Big Infra Deal

Piramal, Dutch APG tie up for $1 bln infra investment  Full Article 

L&T Slumps

L&T Slumps

L&T earnings raise 'multiple red flags' - Citi  Full Article 

Twitter Results

Twitter Results

Twitter assuages growth concerns for now as shares soar 35 percent  Full Article 

Auto Sector

Auto Sector

VW closes in on Toyota as global auto leader  Full Article 

E-Commerce

E-Commerce

Amazon says to invest $2 billion more in India   Full Article 

Fed Meeting

Fed Meeting

Fed seen trimming bond buys, could offer vague rate clues  Full Article 

Gaza Conflict

Gaza Conflict

Israel strikes house of Hamas Gaza leader, digs in for long fight.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage