Germany’s Corona Aid Was Fast—But so Were the Fraudsters

(Bloomberg) --

In Germany, even the criminals are efficient.

At the start of the month, North-Rhine Westphalia, the country’s most populous state, paid out 2.3 billion euros ($2.5 billion) to 225,000 small businesses in a day as part of its coronavirus recovery plan.

A week later, Andreas Pinkwart, the state’s economy minister, had to pull the plug. Criminals had built more than 90 fake websites, phishing the data of thousands of aid applicants to channel the money to their own pockets.

“Our investigation indicates that this was a professionally set up criminal campaign, which pointedly exploited the high pressure of companies and the government alike to cope with the corona crisis,” said Markus Hartmann, the prosecutor heading the cybercrime team at the State Office for Criminal investigations.

Governments are pouring money into their economies to help companies tackle the worst crisis since the Great Depression. Chancellor Angela Merkel pledged more than 1 trillion euros in aid to companies, and also eased access to state wage support for workers. Germany was lauded for being fast and unbureaucratic, using websites to facilitate the process with few strings attached.

North-Rhine Westphalia’s website used a simple digital procedure to collect basic data about a company, and was able to approve 300,000 applicants in the first weekend. Firms with up to nine employees could get 9,000 euros, with the figure growing to 25,000 euros for those with staff up to 50.

Imposters soon sprung up. In the case of North-Rhine Westphalia, the fake websites tricked companies into submitting their data and then used it to file for state aid, with the money diverted to their own bank accounts. The fake pages were displayed prominently on internet search engines, according to the authorities.

“These pages looked astonishingly real,” Herbert Reul, the state’s interior minister, said in a statement on April 14. “It tells you something about the boldness of the perpetrators’ action.”

The investigation found more than 90 fake pages, mostly hosted by servers outside of Germany. Between 3,500 and 4,000 applicants fell victim of the scam before North-Rhine Westphalia took down its own site last week. It plans to restart it Friday.

The state’s health authorities were also among the victims of a cloned website that promised to deliver 10 million face masks that was foiled by European investigators.

Most German states have similar programs and they’ve started warning website visitors about scams.

Across Germany, 1.8 million applications by self-employed people and small businesses have been approved, amounting to 8 billion euros in financial help, according to the Federal Economy Ministry.

Germany’s Economy Minister Peter Altmaier warned that the country will be harsh with people who abuse the system, according to interview with Funke Mediengruppe newspapers.

“A few black sheep endanger the quick payment for many thousands of honest people who now urgently need this help,” he said.

©2020 Bloomberg L.P.