Fraud check coronavirus economic aid

• Autonomous management of entire fraud control process
• Coordination with the development bank
• Direct (anonymous) cooperation with the third party auditor (“prüfender Dritter“) (Engagement Team)

• Global economic crisis due to the covid-19 pandemic and measures subsequently taken such as lockdowns, closing orders etc.
• Granting of Corona economic aid together with the European temporary framework for pandemic-related government aid (Temporary Framework), inter alia in Germany
• The aim was to cushion the Coronavirus shock, to safeguard both structure and substance of the economy and to enable a rapid economic turnaround
• The subsidies were paid out via federal state development banks which take over processing and examination of funding applications, too
• Fraud checks for the purpose of abuse prevention on behalf of the granting authorities; highest level: Team Red

• Processing of extremely complex applications of company groups/concerns involving large funding amounts and high potential risks

• Verification of the entitlement of large corporate companies (groups), many of which were already in economic difficulties at the end of 2019 before the COVID-19 pandemic (insolvency, near-insolvency states, restructuring/reorganization phases)
• Implementation of the review procedures stipulated by the banks with regard to compliance, in addition to preparing decision papers for addressing any gaps
• Review of general and industry-specific overheads applied for, with regard to compliance with the FAQs and other statutory or legal regulations concerning the aid
• Point of contact for the overall project management and preparation of decision papers for internal committees and the funding body
• Proactive support in clarifying areas of doubt and discretionary matters concerning the legal aspects of the aid, and in ensuring uniform checking standards

2. Ensurance that the applications are free from any material misstatements and conform to the legal regulations governing aid

3. Meticulous checking for compliance in view of the funding amounts applied for, which may be as much as EUR 54.5 million, depending on the programme and aid scheme

4. Detection of numerous cases of fraud in the context of abuse prevention; relief for the state treasury

5. Well-structured annotations within the bank’s systems setting out the results of the review process clearly and professionally. This enabled the personnel in the bank who are responsible for approving applications to make decisions on authorization or partial authorization quickly and efficiently

• Procedure model and application process
  • Special economic significance; considerable complexity (state aid law); time constraints; total anonymity; strictest confidentiality; high risks
  • Both filing of application and final settlement of Corona pandemic aid was executed exclusively by the third party auditor (“prüfender Dritter“) (e.g. tax consultant, auditor) and via digital platforms
  • The granting authorities require from the third party auditors submission of clarifications, evidence and supporting documents (no principle of materiality)
  • In the event of deliberately or thoughtlessly false data or incomplete information applicants have to expect criminal prosecution for subsidy fraud (Sec. 264 Criminal Code) and other legal consequences
  • The communication between the application processor in the granting offices and the third party auditor takes place anonymously via digital platforms/online portals of the bank

• Examination of applications requires absolute correctness and faultlessness in order not to be challenged by appeal. Furthermore, documentation of the work results requires to be legally compliant

• Appeal and criminal proceedings

• • If required, besides the bank, also other authorities draw on the results of the application review, e.g.
    • Appeals body
    • Tax authorities
    • Law enforcement agencies
    • German Federal Audit Office
    • German federal ministries