Subsidy fraud KfW loan

Risk of subsidy fraud when KfW loans are utilized

According to § 264 StGB a person is liable to prosecution if he or she presents incorrect or incomplete facts with regard to facts relevant to the subsidy.

This includes, in particular, false information about the company or the self-employed or freelance activity, the number of employees and the ongoing operating material and financing expenses - such as commercial rents, leases, leasing expenses.

Incorrect declarations about other small grants already applied for are also incorrect information. It also becomes problematic with regard to notifications on the need for support. In this respect, the applicant must state the reasons for the economic situation threatening the existence of the company due to the Corona crisis. The applicant must be able to assert that the Corona pandemic has caused it to experience economic difficulties that threaten its existence because the ongoing income from its business operations is not expected to be sufficient to pay its liabilities. While the applicant has some latitude of judgment at this point, this is of course fully reviewable by the criminal justice system.

Incomplete disclosures exist, for example, in cases where it is concealed that company losses are compensated by another company division or false disclosures are made about sales declines that occurred before the Corona crisis.

The Subsidy fraud can be punished with a fine or imprisonment of up to five years. The fact that even grossly negligent false statements are subject to criminal sanctions under Section 264 V of the Criminal Code indicates the real as well as considerable risk of criminal liability for the applicant.

Whether an incorrect or incomplete fact has been alleged depends on the specific information provided in the application forms and the enclosed fact sheets. A comprehensive case-by-case examination must therefore be carried out here and no blanket answer is possible.