Trial: Kindergarten operator in Vienna is said to have embezzled 36 million euros

Several apartment buildings, a riding stable with a riding school for one of the daughters, a ballet school for the son and millions in cash: the 82-year-old is supposed to use the funding that the former operator of the “Alt-Wien” kindergartens received for himself and his children Family financed a luxury life.

The trial against the pensioner, who is said to have swindled his way out of subsidies amounting to 36 million euros from the city of Vienna until his club went bankrupt in the summer of 2016, began on Wednesday at the Vienna Regional Court. “He unjustly enriched himself with tax money,” said senior public prosecutor Veronika Standfest. The 82-year-old used accounting tricks, fake invoices and false annual statements.

The prosecutor framed her opening statement as a reckoning with the 82-year-old’s business dealings, which in her view were based on deception, concealment and fraud. Most recently, his association looked after more than 2,000 children at 33 locations. “In truth, the association was aimed at making profits and increasing assets,” said the public prosecutor. The city of Vienna was deceived and cheated out of 36 million euros.

16 million diverted

The main defendant diverted 16 million euros from this for purely private purposes, which is why he is accused of serious fraud as well as breach of trust. The kindergarten operator is said to have used the 16 million euros to finance a prosperous life for himself, his now deceased wife and his four children. The kindergarten operator acquired seven properties for his four children for around 3.5 million euros, built apartment buildings on them, financed a riding stable and riding school for his daughter, a ballet school for his son and made cash withdrawals amounting to 2.2 million euros, “which did not can be assigned to the operation of the kindergartens,” as the prosecutor noted. He is also said to have used the money to finance vacations and cruises.

The first indications of inconsistencies in accounting came to light in 2013 during an audit by the city of Vienna. An auditor was then called in, who confirmed the irregularities and also expressed suspicion of private withdrawals. However, a funding stop was only imposed by MA 10 in August 2016, whereupon the “Alt-Wien” kindergartens filed for bankruptcy.

“Victims of the City of Vienna”

The main defendant pleaded not guilty. Rather, he saw himself as a victim of the city of Vienna, which would no longer have supported his company: “The end had been prepared for a long time.” This means that “50 years of hard work have vanished into thin air”. He grew up in “modest circumstances”, initially worked as a middle school teacher and then set up the club with his wife. Michael Vallender, the defense attorney for the main defendant, emphasized that his client had not committed any acts of infidelity. As for the accounting, “mistakes may have happened,” admitted Vallender. However, this did not happen intentionally, the defense attorney disputed the public prosecutor’s account, which accused the 82-year-old of “consciously manipulating the accounting.”

Co-defendants are the four adult children of the main defendant, who are said to have indulged in a luxurious lifestyle knowing that the money came from criminal activities. The public prosecutor’s office accuses them of money laundering.

There is a risk of up to ten years in prison

“When parents give donations, they don’t assume that it comes from criminal acts,” said defense attorney Stefan Stoiber, who represents a daughter. Lukas Kollmann, the defense attorney for the other three children, noted that their father was a “patriarch” who gave his children “gifts.” “They didn’t know that the money came from criminal activities,” said Kollmann.

The main defendant noted on this topic that his children “got what they needed from an early age,” “one got a horse, the other a car.” His descendants would never have questioned that.

The trial is initially scheduled to last until the end of October, with further days of negotiations likely to follow in late autumn. If convicted, the former “Alt-Wien” boss could face up to ten years in prison.

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