Investors who put their money in two funds raised by troubled film financier VIP Medienfonds may have to pay e275 million ($362 million) in back taxes after Munich prosecutors wrapped a probe into the company’s operations.
VIP’s former topper Andreas Schmid has been jailed for more than a year during the probe, at the request of prosecutors who feared he would flee the country.
Prosecutors have been investigating Schmid and VIP on suspicion of fraud and tax evasion and said in their report that allegations “had been confirmed to the full extent.”
Munich authorities allege VIP used only 20% of funds raised for film production while keeping the rest in bank accounts. This excludes investors from fully writing off their investment, as the coin was not all used for film production.
“It’s the biggest tax fraud case in German history,” Bremen attorney Jens-Peter Gieschen told German weekly Der Spiegel. Gieschen represents 250 irate VIP investors who are going after VIP and associated banks.
VIP has maintained throughout the probe that it did nothing wrong.
Among films bankrolled by VIP are the upcoming Roland Emmerich-produced “Trade,” Tom Tykwer’s “Perfume: The Story of a Murderer,” Paul Verhoeven’s “Black Book,” Josh Hartnett starrer “Lucky Number Slevin” and teen spy actioner “Stormbreaker.”