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German police make arrests in Maddof-style fraud case

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(Globalpost/GlobalPost)

German police carried out a vast operation on Tuesday against a network of companies alleged to have swindled would-be real estate investors of more than 100 million euros, prosecutors in Frankfurt said.

"Today, about 1,200 investigators and 15 prosecutors carried out 130 searches and seized assets worth more than 100 million euros, as well as issued arrest warrants against the six allegedly responsible, aged between 33 and 70," the prosecutor's office said in a statement.

The sums involved reached hundreds of millions of euros (dollars), the office said.

The operation was carried out across seven regional states, including Hamburg and Bavaria, and 50 people are suspected of involvement.

The prosecutors said police had been investigating a Frankfurt-based company since mid-2012, which the German news agency DPA identified as real estate firm S&K Sachwert.

The company is alleged to have partnered with hundreds of other firms as part of a Ponzi-like fraud scheme, a style of financial subterfuge made famous by US investor Bernard Maddof at the height of the financial crisis.

According to media reports, the company promised investors 12 percent profits on real estate investments, which were then diverted to finance the lavish lifestyles of company executives or pay back the first wave of investment victims.

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http://www.globalpost.com/dispatch/news/afp/130219/german-police-make-arrests-maddof-style-fraud-case