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The federal government has temporarily stopped paying out certain types of aid to companies impacted by measures to contain coronavirus in Germany, citing suspicions that money was obtained fraudulently in several cases.
Payments have been suspended while the Federal Ministry of Economic Affairs reviews the case, but should resume shortly. “In some cases there is a suspicion that state aid has been illegally obtained,” the Ministry said on Tuesday evening, adding that criminal investigations were underway in several cases, but that they could not comment on specifics.
“It’s a shame that attempts are being made here to exploit the plight of our companies in the corona crisis and steal state aid that many urgently need,” a statement on the ministry’s website read.
Other types of aid such as bridge funding and support approved via regional authorities have not been affected by the freeze.
The aid programmes in question are designed to support companies, self-employed workers and associations who have been affected by lockdown restrictions since the beginning of November 2020, with the federal government stepping in to pay a proportion of their usual turnover or fixed costs.
In order to access the funds, companies must apply via so-called “third parties'' - such as tax advisors. However, individuals are said to have registered as third parties with the Ministry of Economic Affairs using false identities. They then applied for the aid on behalf of real companies. However, when the funds were released, they did not flow to the companies, but instead landed in the bank accounts of the fraudsters.
The scam was apparently not noticed by the federal government or the federal states, who are supposed to examine the individual applications, until last week.
According to the ministry, more than 86 billion euros in state aid for the economy has been approved since the beginning of the coronavirus crisis. Business Insider reported that millions of euros could have been obtained fraudulently, although the government has not confirmed this.