Investors Lose Millions in Snowball System Fraud in Southern Hesse

When it comes to the sum that the accused stole from fraud, his voice gets quieter. He says something about “millions”, how many, cannot be understood in the auditorium of the hall in the new building of the Darmstadt Regional Court. The 36-year-old Portuguese Emanuel L. is accused of more than 30 cases in southern Hesse Having fooled investors with a Ponzi scheme. The police and public prosecutor’s office calculated the amount that the accused did not want to say out loud in the courtroom, so the damage amounts to 4.7 million euros.

According to the investigation, Emanuel L. fooled his clients into thinking that he was investing their money in real estate, but in reality the man was using new investors’ deposits to pay installments of the alleged profits to those who had previously entrusted him with money; he also used the investors’ money to pay off his own debts; the promised investment never happened, as the accused admitted on Tuesday.

Emanuel L. waited until the third day of the trial with his confession because his lawyer Frank Peter had previously negotiated a consideration, the promise of an upper limit of the sentence. At the second hearing, the defendant accepted the proposal of the Chamber of Justice, which had promised a prison sentence of between three years and nine months and four years and nine months.

On Tuesday, the accused describes how it came about that he became a credit fraudster. According to him, his work for a financial sales company went well until 2014, but not after that, so that he had to pay back commissions of well over 100,000 euros. Debts accumulated, after all he borrowed 200,000 euros from a private lender – at 20 percent interest for six months. When he failed to repay, the lender threatened him and his family with violence. That’s why he’s “lied to people, told them something about an investment model that didn’t exist” since 2018. For the allegedly profitable investment, the victims themselves took out loans from banks, mediated by the accused and his helpers.

Victims of fraud had to pay for loans

What that means for the deceived becomes clear on Tuesday morning from the statements of three victims. As the young men report, the loans they had taken out themselves incurred installments of more than 2,000 euros a month. First, Emanuel L. took over these installments. But when his payments came only sporadically or didn’t occur, the investors themselves got into trouble, she said. Finally, L. asked for additional loans for an alleged debt restructuring. The victims report that they survived this situation with the financial help of relatives, one of them speaks of a private bankruptcy that he was only able to complete with his wife’s savings. The planned house construction was “cancelled for the time being”.

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The three witnesses are soldiers of the Bundeswehr, they came across the accused through recommendations from comrades. For those cheated, their losses also had consequences in their jobs: the Bundeswehr leadership sees soldiers who get into financial difficulties as a risk because of the risk of bribery. It was certainly not pleasant for the soldiers to be questioned as duped by the military counter-intelligence service, the Bundeswehr’s secret service.