Criminal gangs defraud the state of billions of euros in tax money every year. According to rbb research, they use addicted and homeless people from Eastern Europe as so-called straw men—and a complex web of companies.
It is dark, it smells of mold, and the corridors of the house are cluttered with bulky waste. Tomek Z. opens the door—bare-chested, wearing flip-flops. This 60-year-old man from Legnica, Poland, is the CEO of 13 companies across Germany, including a shipping company with a business address at Potsdamer Platz in Berlin-Mitte. However, he knows nothing about it.
What he can remember, he says in an rbb interview, is that he was once approached in front of a grocery store. At that time, he had no money for drinking. “But you have to drink, as long as someone pays,” he continues. So he “got into the car and drove to Germany.”
In his hometown of Legnica—four hours by car from Berlin—there are eleven other CEOs of German GmbHs. They officially run about 80 companies across Germany from there, many of them in Berlin. These include companies that, according to commercial register extracts, are involved in car, electricity, and real estate trading, as well as construction, shipping, and security companies and export-import firms. However, some of the Polish CEOs, according to rbb research, are long dead, others reported missing. Still others are alcoholics and homeless. They never had anything to do with the actual business of the companies they are responsible for. They are so-called straw men who were unknowingly brought to Germany.
Thousands of straw men in Germany
Legnica, Poland, is not the only place where straw men are recruited for Germany. “These people are brought to Western Europe by the busload,” says Ralf Simon, chief investigator in the Organized Crime Department of the Customs Investigation Office (ZKA) in Cologne. In almost every major investigation, straw men from Poland, Romania, or Bulgaria appear. “We are talking about several thousand straw men and straw companies being used,” Simon continues in an interview with rbb24 Recherche. Their use serves “always to obscure things, to conceal money flows, to hide profits, and to make investigations more difficult.”
When the straw men come from other EU countries, this concealment works particularly well because German investigators cannot simply go to Poland or Bulgaria to talk to a straw man. They have to follow complicated rules, initiate mutual assistance procedures, and hire interpreters. A lengthy process that gives the criminal masterminds time.
For this reason, a veritable “market” has established itself in Germany, according to the Customs Investigation Office, where “professional service providers” offer straw men. All criminal organizations relevant in Germany—whether “mafia, clans, biker gangs”—rely on them, according to investigators.
Professional intermediaries and notaries
For the straw men from Legnica, Poland, to officially become CEOs of German companies, they first had to appear before a German notary. Without notarization, there can be no change of CEO. The notaries must check the new CEOs’ IDs, verify signatures, and assess whether the people before them are even capable of conducting business.
An rbb reporter team reviewed hundreds of notary contracts in German commercial registers over several months. In about 70 contracts, all closed in the name of the straw men from Legnica, the same interpreter was present. He is also from Legnica. According to rbb research, the supposed interpreter is a convicted criminal in Poland. He himself is said to have amassed half a million in tax debts in Germany.
Tomek Z. from Legnica also encountered this “interpreter” multiple times: at a notary near Hamburg, as revealed by the evaluation of notary contracts. But Tomek Z. does not remember this and is surprised during the rbb interview that the notary supposedly notarized the contracts in which he was made CEO. “A notary is an official person, right?” Tomek Z. asks the rbb reporter team. “You know—I was drunk all the time and this notary agreed to it?!” The notary who notarized the contracts was not available for an interview and left the rbb‘s list of questions unanswered.
The system
“The notaries—it’s always the same ones—are part of the system. Without them, the whole system doesn’t work,” says a tax investigator from Baden-Württemberg, who must remain anonymous. The investigator is investigating major tax fraud cases, increasingly also against organized crime. He deals with straw men from Eastern Europe almost daily.
The “system” the investigator refers to consists of complex and barely comprehensible corporate networks. Officially, these networks are led by CEOs from Eastern Europe. Their only purpose, says the investigator, is “to exploit people and harm the tax authorities.” These corporate networks, whose criminal masterminds remain hidden thanks to the straw men, enable serious crimes such as money laundering, smuggling, social security fraud, and million-dollar tax fraud.
When the fraud is uncovered, the first to be investigated are the responsible CEOs, i.e., the straw men. According to the tax investigator, it is almost impossible to take action against the involved notaries in Germany: “It bothers me too, but they don’t have to tell us anything, similar to a doctor. Our hands are legally tied.”
Large-scale economic crime
For Annegret Ritter-Victor of the European Public Prosecutor’s Office, it is obvious that “organized perpetrator structures are increasingly discovering the area of economic crime for themselves.” Recently, the experienced prosecutor managed to imprison the organizers of a tax fraud scheme involving luxury cars and corona masks in a complex case in Berlin. The damage: 50 million euros. Here, too, a German notary, a complex corporate network, and unsuspecting straw men from Poland played a central role. Her colleague, prosecutor Tobias Lübbert, even estimates the total damage of such tax offenses in the EU to be 50-60 billion euros annually.
It is these figures that motivated numerous EU states to establish the European Public Prosecutor’s Office in 2021. It makes cross-border investigations significantly easier, at least when it comes to international tax fraud. Annegret Ritter-Victor and Tobias Lübbert are part of a team of prosecutors that Germany has sent to this new institution. Without better cross-border cooperation, such large fraud systems are hardly detectable, they say. They welcome the recent accession of Poland to the European Public Prosecutor’s Office. Without the straw men from Poland, who often unknowingly lend their names, tax fraud in Germany would not be possible.
