* 1,200 investigators conduct raids across Germany
* Investor fraud seen in multi-million euro range
* Pyramid scheme funded excessive lifestyles
(Adds detail, source close to investigation)
FRANKFURT, Feb 19 Frankfurt prosecutors on
Tuesday said they are investigating two companies based in
Hamburg and Frankfurt on suspicion of involvement in a
multi-million euro investor fraud scheme.
Around 1,200 investigators searched premises in the federal
states of Hesse, Bavaria and Hamburg and six suspects were
arrested, the prosecutor said in a statement. Around 50 people
are under investigation, the prosecutor said.
The prosecutor's office declined to name the companies or
the people involved.
A person close to the investigation said one of the
companies was real estate group Deutsche S&K Sachwert AG in
Frankfurt and the other was Hamburg-based United Investors
S&K did not respond to requests for comment. United
Investors Treuhand also did not respond to requests for comment.
The scheme involved the fraudulent acquisition of investor
funds as part of a so-called "snowball investment scheme," the
Frankfurt prosecutor said, using the German term for a pyramid
The mismanaged funds served to support an "extremely
excessive lifestyle" on the part of the accused, the prosecutor
said. Investor funds were transferred to companies controlled by
the accused managers and to their family members.
(Reporting By Edward Taylor, Arno Schuetze and Jonathan Gould;
Editing by Martin Zwiebelberg and Jane Merriman)