– Case by case EUR 50,000, insolvency or three years for fraud or tax evasion –
Social security clearing as a pernicious fraud scheme
Already to 05.05.2006 took place in Munich the first symposium for the recovery (also allegedly) wrongly paid social security contributions for mediators of all kinds from the insurance industry. The initial aim was to obtain reimbursement of contributions from the German Pension Insurance Association (DRV), for the last up to 30 years. However, at its core, this
Refer assets to a life insurer or sponsor – for a commission.
However, the DRV stopped paying out five- and six-figure sums, and the legislature shortened the period for reimbursements to the last four years; whereupon the initiator did not earn a sufficient success fee and finally had to liquidate. Cooperation partners also liquidated – for example tax offices – because of prohibited legal advice (cf. BGH, judgement
of 20.03.2008, Az. IX ZR 238/06) with an obligation to repay the fee. Sometimes the exemption from the obligation to pay contributions to the DRV was successful, but mostly only for the future, by means of a status check.
Social security trap: Missing or incorrect status check leads to non-payment of benefits
If family members have simply been registered with the social security system, contributions to unemployment insurance are often paid without there being any entitlement to benefits – for example, because the relative had been (co-)active as an entrepreneur. The prospect of a reduced earning capacity pension can also turn out to be a nice pipe dream.
Health insurance trap: The non-binding notice of exemption from the statutory health insurance fund
The public prosecutor’s office is investigating an insurance broker from Stuttgart whose “design” was to obtain “exemption certificates” from various statutory health insurers (GKV) instead of the DRV, which has been solely responsible since 2005. The Federal Social Court (BSG, judgments of 19.09.2019 and 24.09.2019, Az. B 12 R 25/18 R, B 12 KR 21/19 R, B 12 R 7/19 R,
B 12 R 9/19 R) confirmed the lack of competence of the GKV, whereupon hundreds of exemption notices were withdrawn, § 44 SGB X. The employers (AG) also received mail from the GKV,
for the back payment of social security contributions plus interest. The allegation of intentional evasion by AG is touched.
Prospect of additional payments to GKV, DRV – as well as insolvency and criminal proceedings
Who changed due to an illegal exemption notice to the private health insurance (PKV), instead of insuring voluntarily in the GKV further, pays now in the end
for the same period effectively twice.
And those who had banked on a private pension found that the (surrender) value was only a fraction of the contributions paid in. For the last three months, the
The employer or the family business is then solely liable for the rest, § 28g SGB IV. Not only a disturbance of the family peace is to be feared – also damage claims against the initiator as well as the GKV.
Bankruptcy protection trap for family entrepreneurs
More frequently, company pension schemes – such as provident funds (UK) – are also brokered in connection with the (alleged) social security exemption. To most
Participants are not aware of the acquisition and administration costs (incurred by the insurer as well as the UK) and commissions paid – therefore this route is questionable for employee pensions.
In addition, complete insolvency protection and Hartz IV security through pledging are frequently advertised by the sales department. Affected persons then usually rub their eyes when, due to personal liability – also of the managers of family businesses – for arrears in social security contributions, access to assets through compulsory enforcement is nevertheless quite successful.
Statute of limitations trap for social security contributions
In the event of negligence on the part of the family business owner, claims for back social security contributions become statute-barred within four years of the end of the calendar year, § 25 I 1 SGB IV. If
However, if (conditional) intent is in question, this period is extended to 30 years. If an audit by the DRV’s inspection service does not give rise to any objections, this does not result in any protection of the status quo or legitimate expectations (BSG, judgment of 18.11.2015, ref. B 12 R 7/14 R). If the next auditor takes a more critical look, this may well lead to additional claims for up to 30 years. Finally, family business owners are considered professionals, or knowledgeable, in payroll because of professionals employed.
Even whose activities had legally led to an exemption (for example from the obligation to pay contributions to the DRV) can become an evader by omission if the content of the activities changes (BSG, judgements of 13.12.2018, ref. B 5 RE 1/18 R and B 5 RE 3/18 R). Since it is the activity actually performed that is important here, however, this also offers opportunities for intentionally creating the social insurance obligation – for example, for switching from PKV to GKV.
A deceased had failed to notify the DRV of the remarriage, and widower’s pension continued to be drawn – an estate liability with liability for more than 10 years (SG Karlsruhe, judgment of 10.01.2019, Az. S 3 R 339/18), because § 45 SGB X does not apply in the case of (conditional) intent.
PKV exemption trap due to foreign EU certificates
A currently more frequent illegal arrangement variant, in order to come at the age over 55 years, from the private health insurance back into the allegedly permanently more favorable GKV, is the form E104. Consultants promise to bring the customer from the PKV into a certain BKK, which accepts any e.g. Polish EU certificates unchecked. Using the purchased (courtesy) certificate E104 is likely to be as unhealthy as using E605 in an omelette.
If an E104 tariff arrangement is discovered at some point, and if, for example, the DRV has then paid a pensioner part of the contributions to the GKV (or PKV), the reclaiming of the overpaid gross pension by the DRV is more than a fear.
And if the contribution payments (in a period of up to 30 years) to the DRV had already been made illegally at times, at most those of the previous four years will be refunded – the DRV pension wrongly paid in this respect would have to be refunded after a reclaim notice. Any uncertainty about the desired obligation(s) to pay contributions can be covered by design.
When unqualified consultants want to sell model fairy tales, it is a good hypothesis to first assume three alternatives: It’s a fraud, a lunatic, or just plain clueless. Also, the belief in the efficacy of “official permits” by family entrepreneurs may have been very naive, as well as in accompanying legal opinions and “specialist assessments” of what was supposed to be a good idea, or what was once thought to be a good idea, in those distant days, nights, and early years, in that ancient time when all things were given their place and heaven and earth were separated. It has also happened that the public prosecutor has prevented the Financial Supervisory Authority from intervening until the number of victims and the amount of money evaded had reached the level required for the desired penalty. Some of them are not yet in hell, because they have not yet finished designing a very special place for them, and are still up to mischief here.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
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About the author
PhD, MBA, MM
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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