Success Stories
White-Collar Crime to the Detriment of Automotive Manufacturing Group
Firms Involved:
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Austria - Fellner Wratzfeld & Partner
Italy - Carnelutti Studio Legale Associato
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South Africa - Fairbridges Attorneys
Switzerland - Wenner & Uhlmann
Project Description:
In March 2012, the top level and Germany-based European affiliate company of a non-German automotive
manufacturing group learned that one of its most senior European managers had secretly implemented a complex kickback billing scheme in the time period from 2002 to 2011. With the help of other individuals and companies outside the
group, he had accepted in his position illegally inflated invoices issued by a contracting company, and thus embezzled
millions of euros over the years.
The employing company (hereinafter the “Client”) asked Loschelder Rechtsanwälte, who had provided advice on
employment and labor law matters on a day-to-day basis for years, to support it in seeking compensation to the greatest
extent possible. Investigations into the misappropriations led the Client to locate numerous assets including homes,
bank accounts, vehicles and yachts which had been purchased with the misappropriated funds in Germany and other
countries. The mandate developed quickly into a multi-layer and multi-national case that involved, besides criminal
investigations and proceedings in Germany and Austria, civil and common law measures on behalf of the Client in
Germany, Austria, Italy, South Africa, and Switzerland.
The task was, on the one hand, to assert the Client’s claims for damages and obtain judgments in this regard and, on the
other hand, to preserve the various culprits’ assets to ensure that those were still there when judgments would be
obtained and could be enforced. In order to achieve this, Loschelder Rechtsanwälte teamed up with foreign law firms,
mostly TerraLex members. Additionally, the team was joined by Cologne-based criminal lawyers Corts & Partner, who
had been asked by the Client to represent it in the criminal proceedings, receive information from the authorities and
prepare this information for use in the civil proceedings. In this regard, the following measures have been taken to date
in very close cooperation with the Client’s in-house team:
In Germany, Loschelder Rechtsanwälte first obtained interim freezing orders on an urgent basis in light of likely claims
for damages of at least 10 M EUR against the former manager and against the owner and managing director of the
contracting company which had issued the inflated invoices. The orders were enforced against the known assets of the
two individuals in Germany, thus establishing liens on these assets to the benefit of the Client, and they were the legal
basis for enforcement measures in European countries.
At a later stage, Loschelder Rechtsanwälte successfully brought a lawsuit on the merits against the former manager,
asserting a claim for damages of approx. 10 M EUR, and obtained a judgment in late March 2013. So far, various steps
have been taken to enforce this judgment, thereby enabling the Client to satisfy a portion of its claim against its former
manager.
Additionally, Loschelder Rechtsanwälte filed for insolvency against the owner of the contracting company in order to
prevent tax authorities from privileged utilization of the individual’s assets. Moreover, Loschelder Rechtsanwälte
represents the Client in insolvency proceedings against two German companies that were involved as sub-contractors in
the billing scheme.
In Austria, TerraLex member firm Fellner Wratzfeld & Partner enforced, on the grounds of European and Austrian law,
the German interim order and judgment against the former manager into his various Austrian immovable properties and
bank accounts, first in order to freeze these assets and establish liens, then to finally utilize them.
Furthermore, Fellner Wratzfeld & Partner represents the Client in the Austrian criminal proceedings against the former
manager and other suspects as well as in insolvency proceedings against various Austrian individuals and companies that
were involved in the billing scheme.
In Italy, TerraLex member firm Carnelutti Studio Legale Associato similarly enforced the German order and judgment
against the former manager.
In South Africa, TerraLex member firm Fairbridges attorneys first successfully launched, on an urgent basis, a three part
anti dissipation application against the former manager to preserve the assets purchased and located in South Africa
with the misappropriated funds, thus obtaining a freezing order on various bank accounts held in his name in South
Africa, an interim order to freeze four immovable properties registered and situated in Cape Town, and a final motion
that had the two interim orders aforementioned made final. After the final judgment in Germany was obtained, a
further three part application is under way. Most recently, the first one, whose aim was to attach all of the immovable
property in South Africa to confirm the court’s jurisdiction over the former manager, was successfully obtained.
In Switzerland, law firm Wenner & Uhlmann enforced the German judgment against the former manager into his Swiss
bank account.
Overall, there is still a lot of work ahead to satisfy the Client’s claims against the various culprits and their companies,
and it appears that the loss suffered will likely never be satisfied completely. However, the Client’s Inhouse Team and
the team of law firms has so far successfully taken every step possible under the respective local law in order to assert
the Client’s claims and to freeze and utilize the various culprits’ assets. Together, the national law firms involved have
cooperated as a “well-oiled machine” (per Natasha Steinberg of Fairbridges) to the Client’s benefit.
Contact:
F. Thilo Klingbeil - LOSCHELDER
[email protected]
Telephone: +49 (0) 221 65065-200
Martin Empt - LOSCHELDER
[email protected]
Telephone: +49 (0) 221 65065-339
Dr. Henning W. Wahlers - LOSCHELDER
[email protected]
Telephone: +49 (0) 221 65065-220