German property tycoon blames banks for failure
THE former German property tycoon, Mr Juergen Schneider, yesterday admitted using fraud to secure loans worth billions of deutschmarks, but blamed the banks for failing to scrutinise his claims.
In a personal statement at the start of his trial in Frankfurt, Mr Schneider said he would not seek to present himself as "an innocent lamb".
"I presented office space I hoped to create in the future as current reality, future rent as assured income and future value as current economic substance" he said.
But he left the court in little doubt that he intends to damage the reputation of the Deutsche Bank, which he accuses of driving him out of business in "a lightning action".
Mr Schneider (63) fled Germany with his wife Claudia in April 1994 after his property empire collapsed owing more than DM5 billion (Pounds 1.8 billion) to 1600 creditors, including small building contractors as well as banks. After more than a year on the run, the fugitive tycoon was arrested in Florida in May 1995 - dressed in a T-shirt and shorts and without his trademark black toupee.
The couple were extradited to Germany in February 1996 but Mrs Schneider was released after Mr Schneider insisted that she had known nothing of his activities.
Prosecutors are concentrating their case on five construction projects in Frankfurt, Berlin and Leipzig to limit the length of the trial. But the court has had to commandeer two extra offices just to store the documents for the trial and the description of the charges against Mr Schneider runs to almost 500 pages.
He is accused of falsifying documents to inflate the value of his projects in an effort to secure loans from the banks, charges that could carry a 10-year jail term. As Mr Schneider became increasingly reckless, he even identified the toilets in his buildings as rentable areas, a ploy that went unnoticed by the banks.
"I operated on the basis that these long established banks with their highly qualified loan and mortgage departments had a precise knowledge of the market," he told the court yesterday.
The case has been an embarrassment to Deutsche Bank, whose former chairman Mr Hilmar Kopper angered some of Mr Schneider's smaller creditors by describing the sums involved as "peanuts".