bAV: Suspicion of fraud in bAV distribution

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by Johannes Fiala, Lawyer (Munich), M.B.A. (Univ.Wales), M.M. (Univ.), Certified Financial and Investment Advisor (A.F.A.), EC Expert (C.I.F.E.), Banker (www.fiala.de )
Cooperation Agreement:
A bAV distributor risks trouble with the public prosecutor’s office: Hundreds of financial service providers are apparently supposed to use a model cooperation agreement with tax consultants to promote business. The drafter of the contract has come up with the following commission fee clause for occupational pension sales:
?4.2. Remuneration Tax consulting company The tax consulting company receives an hourly rate of EUR ________ plus VAT for its services. the statutory VAT. The Financial Service Provider agrees that the Tax Consultancy shall invoice the Financial Service Provider and not the Client. The prerequisite for this is that the financial service provider receives remuneration / commissions from brokered business?
Profit sharing:
Who reads the contents correctly notices that the tax adviser is to risk from the outset to work free of charge ? unfortunately that is not permitted to him already professionally today. A ?precondition? for the remuneration is a success of the financial service provider ? namely that the ?financial service provider receives remunerations / commissions from mediated business?
Suspicion of fraud:
According to experts (see Gerlach Direct Investor Protection, DA documents 00.1898.01 and 03.5006.02), a promise of commission is suspected to be incitement to fraud if the tax advisor is to receive a commission from the financial services provider ‘around the back’. The form does not provide for an “open account” with the client and the client’s consent.
The § 263 StGB reads in paragraph III: ‘In particularly serious cases the penalty is imprisonment from six months to ten years. As a rule, a particularly serious case exists if the perpetrator 1. acts commercially or as a member of a gang? The BGH decided that a ?gang? is present, if three persons and more are involved (BGH judgement of 21.10.2002). First person would be then the structure selling, second person the mediator, and third person the tax counsel ? Or can it be determined that already with the structure selling at least three persons are also in the play? Already the promise of a commission can be breach of trust (OLG Cologne, judgement of 13.02.1997, Az. 7 U 19/96) ? also the attempt would be punishable.
Inquiry with prosecutor and VSH:
In its judgement of 13.01.2000 (file no. III ZR 62/99), the Federal Court of Justice (BGH) instructed the financial services provider to provide the investment concepts ? this also includes the distribution methods ? to check for legal plausibility: It would therefore be in line with the diligence of the financial services provider (also ! on his own behalf) to put the matter to the test. The submission of such cooperation agreements to the Public Prosecutor’s Office and the Chamber of Tax Advisors for examination should be advisable before they are used. This also applies to the tax advisor.
In such cases, a pecuniary loss liability insurance will regularly not cover the claim, because if a pecuniary offence is sufficiently concrete, neither the insurer of the intermediary nor the insurer of the tax advisor will cover the claim: If you want to make sure of this, you should not only submit dubious cooperation agreements to your insurer or insurance broker for examination.
Consequences:
The criminal statute of limitations for gang fraud is 10 years. Alone therefore back completion threatens at the expense of financial mediator and tax advisor ? even if the other advice given by financial intermediaries and tax advisors is correct and not objectionable. The Federal Court of Justice (BGH) has repeatedly taken this view, e.g. judgment of 20.05.1987 (Ref. IVa ZR 36/86).
Legal position in the case of commission payments:
Pursuant to § 675 of the German Civil Code (Geschäftsbesorgung), the provision of § 667 of the German Civil Code (Herausgabepflicht) shall also apply to the contract with a lawyer and/or tax advisor. The lawyer and/or tax adviser must therefore hand over to the client everything that he obtains from the agency (BGHZ 109, 260, 264). Any advantage which the agent has received on the basis of an internal connection with the business conducted is deemed to have been obtained from the agency (BGH, judgement of 17.10.1991 – III ZR 352/89, NJW-RR 1992, 560, 561).
The fact that the benefit (commission for tipsters or customer referrals) from a third party (financial service provider, broker, etc.) was not intended for the client (the tax adviser’s client) does not prevent the claim for restitution. This is because § 667 BGB also covers such payments, because they give rise to the risk that the party obligated to perform the service is thereby influenced to the detriment of his principal (BGHZ 39, 1, 2 f; BGH, judgement of 01.04.1987 – IVa ZR 211/85, WM 1987, 781, 782; of 18.12.1990 – XI ZR 176/89, NJW 1991, 1224).
Therefore, for example, a tax adviser or lawyer who has taken on the task of recommending investments to his client must return to the client any commission received without the client’s knowledge (BGH, judgement of 01.04.1987, loc.cit.; of 18.12.1990, loc.cit.).
Seek legal avenues:
Of course, the financial service provider may take over the fee of the tax advisor, but preferably only the payment. The tax consultant has to address the invoice to the client for whom he is working. The bAV sales department was probably also not aware of the change in the UStG since 1.1.2004 ? according to this, no invoice can be issued with services to the financial service provider if the tax consultant has not been active for the latter at all. A commission charge is therefore only conceivable if the tax advisor does not process any order at all in connection with this: However, because the tax advisor is not allowed to act commercially (as a tip giver) according to the professional code of conduct, this is also not repeatedly allowed. The client must know whether the financial service provider pays the remuneration (in any case). The assumption of the tax advisor remuneration may not be dependent by a ?condition? on the success of the financial mediator. Transparency is also required here.
Advanced training needed:
Peter L. Pedersen, head of TUTOR Unternehmensberatung, Neumünster, comments: “Of course, not every financial advisor who comes into conflict with the penal code is also deliberately corrupt. Only here, too, “cluelessness does not protect against punishment”. Anyone who falls for such tricks as a financial advisor must ask himself why he did not learn his profession properly. After all, any adviser today can easily book a professional course such as ‘Certified Management Consultant bAV (iofc)’ and protect themselves from such methods through knowledge.”

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Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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