NRW tax investigator Birgit Orths – perpetrators are global and we are not

tax investigation

Some of the officials have to buy their own equipment because there is a lack of funds.

(Photo: dpa)

Frankfurt Whether cum-ex, tax havens or fraud with Corona emergency aid – the damage to taxpayers from white-collar crime is enormous. However, according to tax investigator Birgit Orths, who investigated all of these cases, the information provided by the German authorities is inadequate. “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 has publicly pointed out tax administration and law enforcement conditions that she believes are untenable. “You let the little ones pay, the big ones let them go,” says the 57-year-old.

Orths has been an investigator for the Düsseldorf 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’s 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,” a perpetrator once told her about the capacities of the German tax investigation.

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Orths demands that the tax investigation, which is part of the state financial administration, should become its own authority. Because in her experience, the tax authorities often slow down rather than support. For example, the senior finance department of the tax investigation department refused to give the police tax data for investigations into fraud in Corona emergency aid – with reference to tax secrecy.

Tax investigators with insufficient equipment

Orths demands that this must be relaxed: “We actually all want this tax secrecy to lead to justice. That 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 in tax investigation. But most white-collar crime cases — whether cum-ex stock deals, gangs, or corruption cases — involved tax crimes, Orths argues.

The facilities are also poor. For a raid on 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 in the tax investigation safe, the 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 of North Rhine-Westphalia does not see the situation as dramatically. In recent years, the NRW tax investigation department has “proven to be extremely effective in the fight against tax evasion and tax fraud,” the authority said. NRW Finance Minister Marcus Optendrenk (CDU) wants to make the fight against tax crime and money laundering the main topic of this year’s Finance Ministers’ Conference. The ministry is in ongoing dialogue with the tax investigators on personnel developments.

Banks report suspected cases too late

In its coalition agreement for 2022, the black-green state government in North Rhine-Westphalia has actually defined strengthening tax investigations and the fight against financial crime as goals. Orths also welcomes the plans of Federal Finance Minister Christian Lindner (FDP) to set up a new federal agency for the fight against financial crime, which should bring together the fragmented competencies.

A prerequisite for this, however, is the reform of tax investigations at the level of the federal states, says Orths. “Why not have a white collar crime and tax evasion law enforcement agency be a separate branch, just below the Treasury Department?”

According to the investigator, banks, stock exchanges and their supervisory authorities, which admitted deficiencies in the wake of the scandal surrounding the financial service provider Wirecard, should do more to solve white-collar crime. They would have to 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 supervisory 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 that they have to make such a report.”

The Securities and Exchange Commission explained that it had already uncovered the tax-driven stock deals in 1991. In addition, the state of Hesse has requested the renewal of the law in the Bundesrat so that the supervisors would have to provide more information about possible suspicions to the tax authorities.

More: Lawyer under suspicion – investigators search large law firm and another company

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