The corona support for entrepreneurs in 2020 had too few checks in advance, making it easy for fraudsters to request advances and embezzle the money before the abuse was discovered. As a result, recovery was often not possible.
This is what prosecutors Marjolein Verwiel and Nelleke Klip, charged with corona-related fraud at the Public Prosecution Service, say to NRC. They have been pushing for stricter ex-ante controls from the start of the crisis, they say. Klip: “We said several times: guys, the floodgates are open.”
Investigators see how criminal gangs and fraudsters have pounced on aid schemes.
The public prosecutor’s criticism focuses mainly on the TVL fixed-cost subsidy, which is rigged to help entrepreneurs through the crisis. The government provided an advance, often in the amount of tens of thousands of euros, which is largely based on information that the applicant was allowed to fill in himself. Sales data from before 2020 were not pre-checked until January this year. And a solid identity check was missing until April this year. The biggest gaps in the TVL scheme have now been closed.
Read the backstory here: Corona support was a party for criminals: ‘You only have to bend over and you have money’
60 million euros
Until last month, the Netherlands Enterprise Agency (RVO), which implements this subsidy, has filed a report against 1,133 fraudulent applications involving 60 million euros in TVL subsidies, out of a total of 4 billion euros. The number of declarations is still increasing: there is a delay in the figures because every declaration is preceded by an investigation. The TVL has been requested by more than 240,000 companies.
According to the prosecutors, fraud is inevitable. But the size could have been limited by better checks before the payment of an advance. The cabinet chose speed over controls. “Everything was aimed at paying an advance quickly,” says Klip. “And then we’ll see if it was right afterwards.”
A check of the turnover data in particular could have prevented a lot of fraud, according to the officers. For example, in the second TVL round, the last quarter of last year, more than six hundred companies received a TVL subsidy, while they already had no turnover in 2019. The TVL scheme is intended for entrepreneurs with loss of turnover. Abuse was found in almost all of these applications: incorrect, higher turnover data for 2019 had been entered in the application.
In criminal proceedings, the Public Prosecution Service gives priority to cases in which it is still possible to recover money. But a significant part of the advances provided has since disappeared, according to the officers, because fraudsters have directly debited or funneled the money to foreign bank accounts.
Fraud corona support Page E6-7
A version of this article also appeared in NRC in the morning of June 15, 2021