It was just another routine operation in the tax office until someone noticed the suspicious payments. Turns out a retired worker bilked the office of a substantial sum over about 15 years, authorities say.
The retiree admitted to embezzling CHF4 million ($4 million) while he worked at the cantonal finance office from 1999 to about 2015, Neuchâtel’s public prosecutor said on Thursday.
The alleged reason was to lift his in-laws, who live in another country, out of poverty. Though the man, whom authorities did not identify, had since left Switzerland to take early retirement, he voluntarily returned to face the music, prosecutor Pierre Aubert said in a statementexternal link.
Since the spring of 2016, he was held in prison while cantonal finance officials and Neuchâtel police investigated and the case was brought to justice. The internal investigations are now complete.
"He is currently anticipating the sentence being carried out and does not dispute any of the offenses he has been accused of," Aubert said.
In the wake of Aubert’s statement, the five-member council that governs the canton released its own statementexternal link, describing the case as “serious” and confirming a series of actions in response to the fraud. However, the council took pains to say the problems resulted from a single person who abused the public trust, not a broader, systemic problem.
The council said it filed a criminal complaint on January 31 and instructed an administrative inquiry by the cantonal finance office to determine “the exact nature of the fraud, the method used and the measures to be ordered at short notice to prevent such a case from recurring.”
It said it already has detailed some of the “flaws that allowed the fraud to last for about 15 years, since 1999”, and begun taking corrective measures in its management and control processes.
“In the eyes of the Council of State, this case is serious. It is treated with the highest degree of importance,” the council said.
An attractive tax haven
Neuchâtel, the capital of the canton of Neuchâtel in western Switzerland, is a French-speaking region that is in the centre of the Jura mountains and along the shores of country’s largest inland lake. The city has 32,000 residents and the canton – well known for its wines, horse breeding and watch making – has 170,000.
In recent years, the area has tried to position itself as a more attractive tax haven while boosting its tax coffers. Such moves – amid tax competition with other cantons – have made the western Swiss canton one of the most attractive in Switzerland for new businesses.
Toward the end of the 1970s, the canton began granting firms tax breaks following massive job losses and a population exodus caused by a slump in the local watchmaking industry.
A criminal complaint accuses the man of fraudulently using a public computer and misappropriating public funds – including more than CHF100,000 in fraudulent payments in January 2016 – to benefit himself or his family. Those payments finally gave the man away when a government finance official spotted them during a routine operation related to a reimbursement.
The misuse of the computer alone is publishable by up to 10 years’ imprisonment, according to Aubert’s statement, which noted that officials had viewed the accused as an excellent employee at the finance office where he worked for several decades.
“The accused said he had spent all of the misappropriated amounts to help his in-laws get out of poverty,” it read. “The country in which he had established himself was not linked to Switzerland by any mutual legal assistance agreement, so it was not possible to verify this information. Some steps are being taken on this point.”