80 Daredevil Scams Of Earth

Businessman Manfred Schmieder, the former head of the German company FlowTex, was lucky that he was born, lived and engaged in dubious gesheft in Germany, and not overseas. In December 2001, the judge sent him to jail for only twelve and a half years. Meanwhile, if we summarize the terms of imprisonment provided for all 244 proven cases of fraud and deception on the part of the accused and his associates, the "theoretical" term of imprisonment is 978 years and 9 months in prison. But unlike the United States, German courts do not add separate terms for each of the crimes.

The FlowTex case, obviously, will long occupy the minds of not only German justice, but also psychologists. How did the former humble and inconspicuous dealer in used cars Manfred Schmieder manage to implement the most ambitious scam in post-war German history?

For obesity (130 kilograms) and greed, journalists dubbed Schmider a "hamster". It was the passion for hoarding that failed the 50-year-old billionaire. Friends of childhood claim that Schmider dreamed of getting rich and wanted to be envied. Coming from a modest provincial family, while still a student economist, Manfred began to sell used cars. After receiving a diploma, he bought a car dump, then he moved to a real estate company, and eventually earned the first million.

He launched his "business" in 1983. The FlowTex company from Baden-Württemberg traded horizontal drilling rigs with which pipes can be laid without opening the asphalt pavement. FlowTex found, as noted in the advertisement, a "revolutionary solution" - to drive pipes into pre-drilled horizontal wells. Colorful catalogs and FlowTex booklets offered customers this "innovative equipment" for drilling. A similar technique does exist and is successfully used in large cities. By the way, its creator is the manager of FlowTex, who described the principle of horizontal drilling back in 1981 and deservedly received a doctorate for this scientific work.

The largest fraud in the entire history of the German economy was built on the principle of a financial pyramid. Banks and leasing companies could not suspect that the holder of the license to manufacture special horizontal drilling systems for pipe laying, the supplier of this equipment and the service company for servicing the systems are in fact the same FlowTex Corporation.

German Wave economic analyst Thomas Kirschning explains the deception mechanism: "The FlowTex company, that is, the leaders of the FlowTex group, were interested in getting more and more bank loans. Their own affairs went with them no matter. How did they succeed? An incorporation system of firms was created. FlowTex sold or leased equipment to leasing companies in order to immediately lease it through shell corporation owned construction companies. This turns out to be a cycle in which more and more drilling rigs constantly appear, which are supposedly stored in a warehouse, either sold or leased, but in fact almost all of these contracts were fake. In total, transactions were concluded on the sale or leasing of 3,411 units, while in fact, at the disposal of FlowTex there were no more than 270 units of equipment. "

Schmieder and his partners easily managed to get loans on fake accounts to pay for horizontal drilling rigs from 120 German banks and leasing companies. At the last stages of the company’s activities, when its budget expenditures reached 60 million marks, Karl Schmitz, the former chief of the Mangeheim branch of Kommerzbank, was hired as a new loan provider. An experienced financier organized the sale of FlowTex bonds - half a million marks each. The flagships of the German financial system, Commerzbank and Dresdner Bank, barely escaped the catastrophe. Until February 2000 (almost before Schmieder’s arrest), they offered false FlowTex bonds to potential investors. For this purpose, sales of securities were held (in fact, they cost less than the paper on which they were printed).