Germany suspends COVID-19 aid for firms over suspected fraud

BERLIN, March 9 (Reuters) - Germany has temporarily suspended financial assistance to some companies suffering under lockdown measures to contain the coronavirus after identifying several cases of suspected fraud, the economy ministry said on Tuesday.

The suspension affects companies which applied for special assistance for November and December as well as some special bridge loans. It said the suspension began on March 5 but did not say how many companies were affected.

The ministry said it had referred the suspicious cases to prosecutors who have launched investigations into the irregularities.

“There are suspicions that in a few cases corona-related state aid was obtained unlawfully through fraud,” an economy ministry spokeswoman said in an emailed statement.

“Payments are being reviewed and temporarily halted. Aid will be made available (again) shortly.”

The ministry did not say how much money was involved but the German-language website of Business Insider, the U.S.-based news outlet that first reported the suspected fraud, put the figure in the millions of euros (dollars).

Business Insider also said the fraud was committed by third parties such as tax advisers who are required by the government to check filings for aid before companies submit them.

Germany launched an unprecedented package of financial aid to help companies, the self-employed and others to weather the pandemic. The measures have included subsidies to cover the salaries of some employees to avoid mass layoffs. (Reporting by Christian Kraemer Writing by Joseph Nasr Editing by Gareth Jones)