FlowTex sold the same drilling machines 23 times — Germany's biggest fraud

FlowTex Technology GmbH was a German company based in Ettlingen that manufactured horizontal drilling machines for the construction industry. Between 1994 and 1999, the company perpetrated the largest white-collar crime in German history. FlowTex had actually produced only 181 real drilling machines, but it manipulated certificates and identification plates to sell the same machines over and over — sometimes up to 23 times each.

The fraud worked by creating fake construction sites. When bank inspectors came to verify that a machine existed, FlowTex employees would move the same physical machine between different sites, showing it to each inspector as if it were a different machine. The company secured loans worth more than €2 billion from banks for drilling systems that had never existed, using forged certificates and serial numbers.

Manfred Schmider and his accomplices were arrested in February 2000. The total damage was calculated at 4.9 billion Deutsche Marks — approximately €3.7 billion today. The four main perpetrators received a combined 58 years in prison, and two state ministers lost their positions. The case exposed how easily banks could be defrauded when they failed to conduct independent asset verification.