French-speaking entrepreneurs have accumulated dozens of fraudulent bankruptcies in a few years, an RTS investigation revealed on Sunday. This system, which is repeated throughout the country, costs the community millions.
With around forty bankruptcies to his credit in eight years, one might believe that Benoît* is a hyperactive entrepreneur lacking success. He has managed companies in many fields: construction, earthworks, painting, plastering, bodywork, transport, etc.
In reality, although he is designated as manager, the Valaisan has never worked in these companies. He plays the role of a straw man, also called a “gravedigger”, who allows the real bosses to hide their bankruptcy.
We located Benoît from the cantonal business registers. The RTS has analyzed nearly 50,000 company liquidations in Switzerland since 2016.
According to our investigation, around forty people caused between 10 and 50 bankruptcies in eight years, liquidating around 700 companies alone. There could be more (see methodology in box).
Hundreds of suspected cases
Obviously, going bankrupt is not illegal. But ruining dozens of companies in a few years seems very suspicious.
“It is clearly an indicator of fraud. The problem is that we cannot detect the first fraudulent bankruptcy,” explains Nicolas Cruchet, a Vaud prosecutor who has prosecuted several gravediggers. The proliferation of cases makes scammers more and more visible.
The kings of bogus liquidations, like Benoît, are probably only the tip of the iceberg. According to our analysis of business registers, more than 170 people have accumulated at least five bankruptcies in eight years.
Similar procedure
Among them, we have identified several individuals who hijack the system thanks to their often identical operating methods. First, a small business owner sells his company in difficulty to a front man, who then appears in the commercial register as sole manager. He then moves the company’s headquarters to cover his tracks and hide the debts, then leaves it abandoned. A few months later, it was liquidated.
The former boss thus escapes his debts and preserves his reputation. He creates a new company, sometimes with a name very similar to the old one, and continues his activity.
To buy this new start, the entrepreneur pays a few thousand francs under the table to the straw man, who inherits the debts. The compensation seems low, but it is the characteristic of a gravedigger: an individual who has nothing to lose and who will never be able to repay.
A retiree overwhelmed by debt
RTS found Benoît. A trained mechanic, then a pharmaceutical products representative, he is now retired. On social networks, he presents himself in a suit, nice cars and vacations at the sea. The 78-year-old from Valais actually lives in a modest studio and accumulates 500,000 francs in debt.
The liabilities of his companies range from a few tens to several hundred thousand francs. The total is in the millions. Contacted, Benoît never responded to our requests for interviews.
But behind this character, we discovered a fraud system with numerous accomplices. And also victims.
Harmed workers and unfair competition
Pietro Carobbio of Unia Vaud defends the aggrieved workers. This manager of the “construction” sector, the sector most affected, has dealt with Benoît on several occasions.
But, for the trade unionist, the real culprits are the bosses hidden behind the gravediggers. These scam employees and create unfair competition. “They do not pay the minimum wage provided for by the CCT, they do not pay social charges like AVS and LPP. Ultimately, they can afford to charge lower prices to obtain mandates. Afterwards, they do bankruptcy and start the same system again,” denounces Pietro Carobbio.
“He’s acting, he’s the real boss”
We contacted Osman*, a boss hidden behind Benoît. His last company participated in large subcontracting projects, notably in Malley. He refutes Unia’s accusations.
-“Call a worker who is crying, you won’t find one. Everyone has received their salary,” he says, referring us to Benoît. “I’m not the head of the company. The real boss is Benoît. He’s the one who takes care of things. It’s in the commercial register.”
To understand who is telling the truth, we found traces of an inside man who collaborated with Benoît. He is categorical. “This boss is playing an act. He is the real person responsible,” he assures, speaking on condition of anonymity to guarantee his safety.
The taxpayer, the main victim
In all cases, the main victim in these cases remains the same: the State. Or more precisely, taxpayers. Before selling his business to a straw man, the real entrepreneur generally accumulates debts with taxes and social insurance.
During the last months of activity, he also no longer paid his workers. The unemployment fund takes over. It limits the harm to employees, but increases the public bill.
When bankruptcy is declared, there is nothing left to seize to pay off these state debts. The equipment was sold or transferred to another company, the accounts emptied. In the cases we consulted, over-indebtedness rose to 636,000 francs for a single company.
Luxury cars and Covid loans
Well organized, some gravediggers still inflate the bill. Sentenced last March, Pajtim* caused around fifteen bankruptcies in the cantons of Vaud, Geneva and Fribourg. Before their liquidation, this Kosovar used companies, already over-indebted, to take out car leases, without ever paying the bills. His judgment mentions in particular 7 Audis, 3 BMWs, a Porsche, a Lamborghini and a Jaguar. Several vehicles have disappeared, probably resold in Kosovo.
Benoît did not limit himself to abusive liquidations either. Valais obtained several Covid credits in 2020 for its dying companies, for more than 400,000 francs. Fraud too much for Vaud justice?
In October 2023, the Court of Criminal Appeal of the canton of Vaud sentenced Benoît to five years in prison. He must repay more than 430,000 francs as well as tens of thousands of francs in legal costs, which brings his debt to around one million francs. The Valaisan appealed to the Federal Court.
Condemned and replaced
If his conviction is confirmed, will the State be able to recover part of its money? Hard to imagine. The 78-year-old man, with only 1,650 francs of AVS income, seems incapable of repaying anything.
As the instructions are long, costly and do not allow public authorities to recover their arrears, many fraudsters slip through the cracks. The authorities are refusing to prosecute certain abuses, even obvious ones. Furthermore, convictions are not enough to stop the system.
According to our information, Benoît was replaced by another straw man. This new gravedigger, also retired, operates in the same environment with a similar operating mode. It has more than fifteen bankruptcies, several of which are very recent, and has not been prosecuted by the courts to date.
“With the new law, fraudsters will have to be more subtle”
But new legislation that came into force on January 1 could curb this type of scam. “It was the highway for fraudsters who knew how to proceed. With the new law, it’s more of a mountain road with bends. They will have to be more subtle and cunning,” says prosecutor Nicolas Cruchet.
The State should now be able to quickly bankrupt unscrupulous entrepreneurs who do not pay their debts to the community. And don’t end up empty-handed.
It remains to be seen whether this will be enough to condemn the real bosses and protect the economy and public finances. The total amount of financial losses linked to bankruptcies amounts to around two billion francs per year. It is impossible to determine what part of this amount comes from abusive liquidations.
Valentin Tombez and François Ruchti
*Names known to the editorial staff
