Smoothly edited images show the view from the Pels Rijcken offices over the Haagse Bos and dressed up students toasting with champagne. There is hip lounge music. “I think it shows very nicely that Pels Rijcken is a socially engaged office”, praises one student at the annual three-day masterclass ‘Mr. Z’. in 2019. Shortly come the two most important men of the prestigious law firm laughing together: State attorney Reimer Veldhuis and chairman of the board Frank Oranje.
They are images of a facade that keeps getting bigger and bigger. Last March, Pels Rijcken announced that during the past ten years, notary Oranje had channeled money from customers into private accounts in three cases through ‘sophisticated fraudulent acts’. On Friday, the Ministry of Justice and Security published a letter from the state lawyer showing that Frank Oranje has robbed customers for “at least 18 years”.
Also read: Motive for fraud remains a mystery
That is almost twice as long as previously assumed. More than 9.5 million euros of the money stolen by Orange is not justified. The widely respected Orange, who committed suicide in November, also appears to have committed fraud in five cases in which the state was a client.
After investigation reported NRC rather that Orange has stolen more than 10 million euros since 2010 that was intended for duped investors in internet company World Online, insurer Converium and for municipalities and provinces that sold waste processor Attero. Veldhuis’ letter explains this in more detail. At the claims foundation for duped investors in World Online, Orange skimmed 1.7 million euros in interest, at waste processor Attero that was more than 55,000 euros. The largest amount disappeared at the Converium claims foundation: 9.5 million euros that belonged to duped investors, he funneled into private accounts.
External research that Pels Rijcken had carried out now shows that the Orange has been committing fraud for much longer – at least 18 years. He transferred money that Orange had to manage for customers to foundations “that apparently fulfilled a legitimate role”, he regularly falsified payment orders. Before the money had to be paid out, Orange made sure that the shortfall in the account was replenished with newly stolen money. “Orange basically filled one hole with another in this way.”
That sounds like a method inspired by a Ponzi fraud. Pels Rijcken does not disclose the ‘original’ stolen amount, which Orange kept replenishing. The office does report that Orange ‘borrowed’ money in five cases in which the central government was a client and fifteen other cases. As a result, they would have lost about 257,000 euros in interest. Just like the missing 9.5 million, that money is still paid by Pels Rijcken.
Two professors engaged
As a state lawyer, Pels Rijcken (290 employees) acts for the state as a legal adviser and lawyer in about a thousand lawsuits a year. Outgoing minister Ferd Grapperhaus (Justice and Security, CDA) informed the House of Representatives on Friday that he found the fraud case “inadmissible”. He has asked two professors to investigate what ‘demands and accountability obligations’ the state can place on Pels Rijcken.
Pels Rijcken’s door was so open that the fraud could have happened
curator Jeroen Princen and fraud expert Marcel Pheijffer
The fact that Orange was able to commit fraud unnoticed for so long at Pels Rijken and became chairman of the board in 2018 shows that the office did not have its internal organization in order. A former top notary called the lack of basic checks at Pels Rijcken against NRC “unexistent”. Curator Jeroen Princen and fraud expert Marcel Pheijffer recently stated that the fraud was not that sophisticated at all. The door was “open at Pels Rijcken to such an extent that the fraud could have happened”.
Also read: So sophisticated was the largest fraud case ever in Dutch advocature not
State lawyer Veldhuis now states that the internal controls were ‘not able to cope with fraud like this’. “As an office, we have relied too much on the apparent integrity and incorruptible reputation of Orange as a civil-law notary and person.” Pels Rijcken appointed a new director in May and, in his own words, implemented numerous measures to meet “the highest standards”.
Despite this, Pels Rijcken was recently placed under stricter supervision by the dean, supervisor of the legal profession. According to the dean, internal controls must be improved and social safety and accountability are not in order.
Pels Rijcken’s external investigation has not revealed where the millions stolen by Orange have gone and what his motive was. The Public Prosecution Service will have to investigate this.
“It has been transferred to private,” said a spokesperson when asked. “We do not have the authority to look into that account.”
A version of this article also appeared in NRC Handelsblad on 17 July 2021
A version of this article also appeared in NRC in the morning of July 17, 2021