Tax investigator – the perpetrators are global and we are not

Frankfurt, January 22 – Whether it’s cum-ex, tax havens or Corona relief fraud – the damage to taxpayers from white-collar crime is huge. But according to tax investigator Birgit Orths, who has investigated all these cases, the information from the German authorities is insufficient. “We are fragmented, regional and slow,” she said in an interview with Reuters published on Sunday. “The perpetrators are global and we are not.” As an active tax investigator, Orths points out public relations in financial management and law enforcement that she considers unsustainable. “You let the small ones pay, the big ones let them go,” says the 57-year-old.

Orths has been an investigator for Düsseldorf’s tax investigation department for twenty years and has been a member of the Organized Crime and Tax Evasion Investigative Group (EOKS) since 2015. In fact, she is not allowed to talk about her work. But some closed cases allow her to report on the investigation and the difficulties involved. From their point of view, the German tax authorities lack the expertise and resources to effectively combat white-collar crime. “You’re running behind a Ferrari on a scooter,” one criminal once told her of the German tax probe’s capabilities.

“THE AUTHORITY BRAKES MORE THAN SUPPORTS”

Orths demands that the tax investigation, which is part of the state’s financial management, must become its own authority. Because in her experience, the tax authorities often slow down rather than support. For example, the overall finance department in the tax investigation department refused to give the police tax data for the investigation of fraud in Corona relief – citing tax secrecy. Orths demands that this be eased: “Indeed, we all want this tax secrecy to lead to justice. This means protecting the citizen, but not protecting the criminal.” This is the only way investigators could bring money back to the state.

The investigator is also calling for more staff. In North Rhine-Westphalia (NRW), around three percent of the 28,000 tax officers work with tax investigations. But most white-collar crime cases — whether cum-ex stock deals, gangs or corruption cases — involved tax crimes, the Orths argue. The facilities are also poor. For a raid against gang crime, Orths writes in a book that she had to buy a balaclava at her own expense to protect her identity. Another time she confiscated banknotes worth over one million euros in a money laundering case. Because the bills did not fit into the tax investigation safe, investigators had to rent a safe in their own name to store the evidence. Tax investigators actually have the same powers as the police, but not the same resources.

The financial administration in North Rhine-Westphalia does not see the situation as dramatic. In recent years, NRW’s tax investigation department “has proven to be extremely effective in the fight against tax evasion and tax fraud,” the authority said. NRW’s finance minister Marcus Optendrenk (CDU) wants to make the fight against tax crime and money laundering the main topic at this year’s conference of finance ministers. The ministry is in ongoing dialogue with the tax investigators about personnel development.

“BANKS AND SUPERVISORY AUTHORITIES MUST DO MORE”

In its coalition agreement for 2022, the black-green state government of North Rhine-Westphalia has actually defined the strengthening of tax investigations and the fight against economic crime as goals. Orths also welcomes Federal Finance Minister Christian Lindner’s (FDP) plans to create a new federal agency to fight economic crime, which will bring together the fragmented competences. A prerequisite for this, however, is the reform of tax investigations at federal state level, says Orths. “Why not have a White Collar Crime and Tax Evasion Authority be a separate department directly under the Treasury?”

According to the investigator, banks, exchanges and their regulators, which admitted shortcomings in the wake of the scandal surrounding financial services provider Wirecard, should do more to crack down on white-collar crime. They should be obliged to report suspected cases more quickly. “The involvement of the banks is very conspicuous in certain areas of crime,” says Orths. In the case of the tax-driven cum-ex share deals, which cost German taxpayers billions, the stock exchange authority should have noticed the conspicuous trading volume around a key date. “You should have asked questions and possibly reported to the tax authorities,” says Orths. “But there is no obligation in the Stock Exchange Act to make such a report.” In addition, the state of Hesse has requested a renewal of the law in the Bundesrat, so that the supervisory authorities would have to provide more information about possible suspicions to the tax authorities.

NRW tax investigator – the perpetrators are global and we are not

Source: Reuters

Symbolic photo: image by Lucio Alfonsi on Pixabay

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