Covid loans: criminal charges exceed CHF300 million

Fraudsters most often come from the construction, catering and trade sectors Keystone / Salvatore Di Nolfi

So far 2,767 criminal charges have been filed in Switzerland for potential or actual misuse of Covid-19 bridging loans. The amount owed could be up to CHF307 million ($335 million).

This content was published on April 2, 2023
Keystone-SDA/NZZ am Sonntag/ts

This is according to figures updated at the end of MarchExternal link by the finance and economics ministries and reported by the NZZ am SonntagExternal link.

Some 708 of the 2,767 criminal charges have been concluded and 2,059 are still open. In the closed cases the delinquency amount – the amount owed that has not been paid by a specified date – is around CHF59.3 million and in the open cases CHF247.5 million.

The fraudsters most often come from the construction, catering and trade sectors, the newspaper said on Sunday.

According to the finance and economics ministries, the delinquency amount corresponds to the volume of the loans at the time they were granted. It does not take into account whether losses were actually incurred.

The State Secretariat for Economic Affairs (SECO) also stated on Sunday at the request of the finance ministry that the amount does not mean that the funds are lost to the government. It confirmed the total delinquency amount.

Abuse ‘unavoidable’

To secure liquidity during the Covid lockdown, companies could apply for Covid-19 loans between March 26 and July 31, 2020. Some 125 banks participated in the bridging loan programme.

The government granted a maximum credit guarantee of CHF40 billion. Almost 138,000 Covid-19 loans totalling around CHF17 billion were granted during this period.

The table from the finance and economics ministries also shows that in 4,405 cases a correction was made without a criminal complaint. In 1,933 cases, suspicions of abuse were not confirmed; 4,648 cases are still being investigated. The list includes only criminal charges of which the guarantee organisations are aware.

SECO presented an audit concept for combating abuse in May 2020. At the time, it said that the bridging assistance was deliberately designed to be unbureaucratic and that it was unavoidable that there was a potential for abuse.

It said the main risks of abuse would be incomplete information in the application form, possible incorrect turnover information or companies that are in bankruptcy or inheritance proceedings or in liquidation when the application is submitted.

Recent convictions

In recent months convictions of suspected Covid-19 emergency loan fraudsters have repeatedly come to light. In November a Lausanne criminal court sentenced a businessman to six-and-a-half years in prison for Covid loan fraud and other offences.

The man had allegedly provided false information about his companies in the application for the Covid-19 emergency loan and inflated the turnover figures of his companies. He had received a Covid-19 emergency loan of CHF3 million.

A few days ago a suspected Covid fraudster was arrested at Zurich airport as he tried to leave the country. He is accused of having wrongfully obtained a Covid loan of almost CHF300,000 as a board member of a company registered in Zug.

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