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Article: Another racket: German fraud. (Balsam)
- Article from:
- The Economist (US)
- Article date:
- June 11, 1994
CopyrightCOPYRIGHT 1994 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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FOR the second time in three months German banks have learnt that they may have lent hundreds of millions of D-marks under false pretences. In a case eerily similar to the collapse of Jurgen Schneider's property empire in April, an official of Balsam, a Westphalian company that makes tennis courts and other sporting surfaces, has revealed that it has been borrowing money against doctored invoices for years. A German prosecutor who has arrested all four members of Balsam's managing board, estimates that its total debt is some DM1.6 billion ($963m).
The chief victim of the alleged scam appears to be Procedo, one of Germany's biggest factoring companies, which did up to ...