Many companies in Germany are experiencing economic hardship due to the corona crisis. The government has acted quickly and created emergency measures for those affected. The first of those have been paid out since March 30, 2020.
But the promise to provide non-bureaucratic help can also lead to painful repercussions.
Not all applications are currently being checked
In order to deal with the onslaught of applications and to keep the promise of non-bureaucratic support, the entry requirements for aid from the federal states as well as the federal government are comparatively low. They do however carry the danger that these applications are only checked on a random basis. In addition to general information (name, address, bank details, etc.), one must assure that there is indeed an economic need due to the corona crisis and then describe the nature of that need.
The applications are currently being examined only superficially. It is therefore likely that some applicants who do not qualify for these aids will “slip through”.
Filing of some applications might be punishable by law
The use of state benefits without fulfilling the relevant requirements can constitute economic subsidy fraud (Section 263 StGB). This carries a prison sentence of up to five years or (heavy) fines. In particularly severe cases, even a prison sentence of up to ten years is possible.
High Risk of Detection
Currently, the risk of discovery is probably low. But in a few weeks at the latest, once the first rush has subsided, the authorities will definitely review the applications made and ask critical questions. The risk of discovery is also increased by the fact that the economic situation can be determined from the tax returns / annual financial statements. The tax authorities are thus handed all the evidence on a silver plate.
Short-time work is also affected!
Ordering arrangements for short-time work and the corresponding application to the bureau of labor can – if the requirements are not met or falsely snuck into the application – justify criminal liability. It is a matter of dispute whether the short-time working regulations are subsidies within the meaning of Section 264 of the Criminal Code. However, even if this were not to be the case, employers can still be punished for “simple” fraud, which, in the worst case, carries a prison sentence of six months up to ten years.
Renegotiating contracts can also be punishable
Renegotiations with contractual partners due to the corona crisis can also constitute (attempted) fraud (section 263 of the Criminal Code) if your own negotiating position is improved by referring to an existential emergency that currently does not yet exist.
Check the requirements carefully
So do check carefully whether you meet the requirements for state aid / support programs. In case of doubt, you should rather disclose too much information than too little when arguing your economic emergency. It is wise to describe any existing reserves and to explain why they cannot currently be used. If you disclose this and make a transparent application, the likelihood that the authorities will later accuse the applicant of deliberate behavior is significantly lowered. A criminal liability should only be fulfilled if an application was made knowing that the applicant is not entitled to a claim.
If you are in any doubt, it is better to contact your lawyer or tax advisor in advance before claiming state aid.
If you actually come to the conclusion that you have provided incorrect or incomplete information, do absolutely contact a criminal defense lawyer before you correct the information yourself. This is especially true before filing a tax return. We are happy to assist you with this. Feel free to contact us by e-mail or phone (+49 (0)69 76 75 77 80).