The Netherlands Labour Authority's Investigation Service today arrested 4 suspects from The Hague on suspicion of fraud in relation to the Temporary Emergency Scheme for Job Retention (Noodmaatregel Overbrugging Werkgelegenheid, NOW). During the operation, searches were also conducted at homes and business premises in both the Netherlands and abroad and bank accounts, cash, luxury goods, real estate and cars were seized. The authorities suspect that more than 8 million euros in wrongly received NOW funds were diverted to recipients in the Netherlands and elsewhere.
The Investigation Service launched the investigation following a report from the Financial Intelligence Unit (FIU). An FIU report is an obligatory response to an unusual transaction under the Money Laundering and Terrorist Financing (Prevention) Act (Wet ter voorkoming van witwassen en financieren van terrorisme). They can be filed by financial institutions and are intended to help identify fraud and prevent money falling into the hands of criminals.
Public funds diverted
The suspects arrested were associated with 2 employment agencies in The Hague that had forged documents in order to obtain NOW funds. The companies applied for NOW funds claiming that they had lost turnover while, in reality, their turnover had significantly increased. The companies were aware of this when they applied. The fact that the funds were forwarded to other parties means the companies are also suspected of money laundering. The investigation is being conducted under the authority of the National Public Prosecutor's Office for Serious Fraud, Environmental Crime and Asset Confiscation (Functioneel Parket).
Temporary Emergency Scheme for Job Retention
The Temporary Emergency Scheme for Job Retention was brought in during the coronavirus crisis to enable employers to keep paying their employees and to prevent job losses. The scheme was implemented by the Employee Insurance Agency (UWV).
Misuse of public funds
Some businesses abused this scheme by engaging in socially unacceptable fraudulent behaviour, which is what prompted the Investigation Service to conduct a number of criminal investigations. Several arrests relating to NOW fraud have been made in recent years. Earlier this year, the Netherlands Labour Authority published a report on the strategy to combat fraud involving NOW funds (Dutch).