Waterfront fraud scandal

Edition 18 May, by Peter Sharpless

A year on from the shocking revelation that the tenants of the Waterfront Stage in Rotterdam were suspected to have defrauded 8 million euros from the city municipality and the main culprits are still on the run. By invoicing for construction work that never took place, a father and son managed to defraud millions of euro. A committee set up to investigate the affair has closed and, if anything is clear at this point, it is that there are lessons to learn from the many mistakes that have been made.

Like Father, Like Son

A father and son were tenants of the Waterfront stage and, in the process, they are suspected of having taken 8 million euros from the city. The father and son duo are thought to have done this primarily by creating invoices for contracts with the city of Rotterdam, that were never executed. They would create invoices for fictional construction jobs that ‘took’ place on Waterfront premises. It is suspected that their scam went unnoticed for so long because they submitted a high number of their invoices when the manager was not working.

Blunderfront

On the breaking of the news, the local municipality of Rotterdam set up a committee to investigate how the fraud happened and who should be held responsible for it. 8 million euros was declared unaccounted for, from the Waterfront stage in Rotterdam. A Father and son were tenants and stole money by creating fake invoices for construction work.

No rent was paid on the property for five years.

The committee has had 16 sittings since it was set up and, at its most recent meeting, it concluded that a great deal of ‘blunders’ had been made at various levels of city management. Two local government officials from the city of Rotterdam were suspended from duty, as the committee announced its intention to investigate the alleged fraud. The majority of local government in Rotterdam welcomed the move to open an investigation into the missing money.

Foreman Ronald Buijt van Leefbaar welcomes the measure. “This operation is an indication that this was a deliberate act. Who has acted as an official in good faith is not released from his duties in the meantime. ‘’ Like a large part of the Rotterdam council, Buijt says to be relieved. “If there has been a deliberate fraud, and it’s all apparent, then you can conclude that it’s not a part of the system. Here, people have been at work who have taken the trouble. That’s how crazy it might sound after such a huge loss, it’s a relief. “

Did you pay the rent?

One of the most startling revelations from the committee was that there had been no documentation of rent being paid for the Waterfront stage for five years. Alderman Ronald Schneider (Real Estate, Leefbaar Rotterdam) had to brave questions about how he failed to see the payment, or the lack thereof, for rent since he started work in the housing department. Nor did he think anything was wrong, he had no indication of any wrongdoing.
“I had no insight into the business. I also had no indication that things were not in order, “he said. It was only when the fraud was discovered that he realised something was amiss. The committee also heard from various officials including Adriaan Visser, the current governor responsible for the municipal organisation and finance.
What makes Adriaan Visser a person of interest is the fact that he held a different role in 2010, the time the lease for the premises was signed. Mr Visser was the general director of real estate service OBR, the same service responsible for the lease. Mr Visser emphasized during the hearing that he had nothing to do with the lease.

The blame game

Unfortunately for those wanting to read about the supposed riches of crime, the story of the Waterfront fraud has much more to tell.
Other than the obvious criminal culprits, the Municipality of Rotterdam was eager to investigate who else was to blame in the case of the missing 8 million. Although the number of people that may have deliberately defrauded the municipality may be low, those responsible for it happening may number higher. It has been established that accountants both internally at the municipality and externally should have spotted discrepancies.
As is quite often the case with a root and branch investigation, those who are being investigated are at odds with one another. A clear division has been highlighted between municipality staff, higher management has denied complaints about ‘unworkable workplace situations and a lack of staff’.

The fact that it was not good at the workplace was apparent from the evidence heard in previous hearings held by the committee. Lower ranking officials painted a picture of a department where there were continuous disruption and miss-management.

Theft

The main actor wanted for criminal involvement is still on the run. The father, who it is suspected is responsible for failing to pay any rent and defrauding millions, is suspected to be in Turkey. He is described as less nice than his son and also has a history of business and tax issues, declaring bankruptcy and leaving a 2 million euro tax bill. The municipality has made it clear that it intends to recover the funds but with the main culprit in Turkey and due to political tension, in the event, an extradition request was made; it would likely be rejected. In the event that the municipality recovers all the money lost including lost rent, it is still left with a large amount of egg on its collective face. The Waterfront scandal has shocked not only those affected in Rotterdam but the whole of the Netherlands. The whole thing has been and still is, an embarrassing saga.