Kirch probe widens to tax fraud

Case against former Teutonic media mogul expands

BERLIN — The investigation against former Teutonic media mogul Leo Kirch and his former deputy CEO Dieter Hahn has intensified after tax authorities joined prosecutors probing suspected breaches of trust, illicit loans, illegalities linked to the bankruptcy of Kirch Media and now tax fraud.

Herbert Schroder, former finance chief at Kirch Media, which collapsed last year in Germany’s biggest post-war bankruptcy, was released from jail last week on E100,000 ($116,627) bail after three days in custody.

Schroder is suspected of transferring millions from Kirch Media to Kirch’s associates just before its bankruptcy in April 2002. Some $70 million was loaned to Kirch’s friends, company execs, consultants and son Thomas Kirch. He landed a $3.5 million consultancy contract without the approval of Kirch Media’s supervisory board — violating corporate law, according to prosecutors.

Munich’s district attorney is also looking at a contract with Kirch associate and attorney Joachim Theye, who reportedly received $5.8 million between 1999 and 2001.

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