Austrian prosecutors accuse René Benko of embezzling tens of thousands and thousands

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Vienna felony prosecutors have accused René Benko of embezzling tens of thousands and thousands of euros within the run-up to the collapse of his actual property empire in 2023, together with probably by way of the €46mn sale of an Italian luxurious property by his Signa group to a non-public basis authorities say was in impact managed by him.

Benko, who presided over a gaggle that at its peak owned half of New York’s Chrysler Constructing, a part of Selfridges in London and a few of Germany’s greatest malls, was arrested in Austria final month following a felony investigation by prosecutors in Vienna, Munich and Berlin.

However Signa, which was constructed on €5bn of debt, began to disintegrate in late 2023 when considered one of its central firms, Signa Holding, filed for insolvency. Benko himself filed for private insolvency final March.

Benko has been in pre-trial detention in Austria since January over alleged aggravated fraud, embezzlement and fraudulent chapter.

Prison prosecutors in Berlin and Munich are additionally investigating potential misconduct and Italian regulation enforcement companies issued an arrest warrant final yr over alleged suspicious funds to native officers.

In December, a lawyer for Benko mentioned his consumer was assured that “any allegations towards him might be clarified as substantively incorrect”.

In line with a 38-page arrest warrant issued by Austrian prosecutors and seen by the Monetary Occasions, Benko is accused of deceiving enterprise companions to inject €35mn into the failing property holding firm whereas concurrently shifting money and belongings price tens of thousands and thousands of euros out of collectors’ attain — together with furnishings price €8mn, a €90,000 Patek Philippe watch and costly searching rifles.

One of many contentious transactions recognized by prosecutors is the sale of the posh property Villa Eden Gardone in Italy in 2023, initially owned by Signa Holding and bought in August 2023 for €46mn to a basis formally managed by Benko’s mom Ingeborg.

As a substitute of money, prosecutors state that the mansion was paid for utilizing shares in a Signa subsidiary that grew to become nugatory when the entity filed for insolvency three months later.

Prosecutors allege that the transaction was “synthetic and economically implausible” because it swapped luxurious actual property for an closely devalued fairness stake in a struggling firm.

They declare the transaction was performed haphazardly and the sale paperwork lacked an in depth description of the belongings altering arms, usually commonplace process for such a fancy deal.

Furthermore, prosecutors allege that Benko referred to as the photographs at two household foundations — one notionally managed by his mom Ingeborg, a retired nursery faculty instructor, and one by his daughter Laura — which had been events to plenty of probably suspicious transactions.

Prosecutors additionally raised considerations a few €2mn money fee in 2023 Benko made to an individual near him: a part of a collection of funds between 2018 and 2023 that totalled €15.5mn, in line with the arrest warrant.

They accuse Benko of concealing his possession of furnishings price €8mn in an Innsbruck mansion and took concern with a fee of €360,000 in October 2023 to a authorized entity that owned a property he utilized in Innsbruck, characterising it as an advance fee of hire for the subsequent 4 years. Prosecutors declare that this fee lacked any “goal justification”.

Similtaneously Benko was orchestrating the alleged asset stripping in 2023, he was allegedly additionally deceptive buyers about his monetary well being.

In mid-2023, when his personal funding car was down to a couple thousand euros of money in its checking account and in line with the investigation in impact bancrupt, Benko promised that he would personally contribute €35mn to a €350mn capital enhance of Signa Holding, the arrest warrant states.

The prosecutors declare that he channelled investments by two of his enterprise companions by way of a number of authorized entities in his empire to masks the origin of the funds, after which misrepresented the cash as his personal contribution.

A lawyer for Benko didn’t reply to a request for remark. Vienna prosecutors declined to remark.