VW currency chief admits fraud

Press, 16 September 1987, Page 22

VW currency chief admits fraud

NZPA-Reuter Hanover Volkswagen AG’s former head of foreign exchange, ’ Burkhard (“Bobby”) Junger, has confessed to a currency swindle which cost the company 480 million marks (SUS 266 million), a spokesman for the Lower Saxony state justice Ministry said. Hartmut Moellring told Reuters that Junger, who has been in detention since April while the case against him was investigated, admitted to masterminding, the fraud with a Frankfurt foreign exchange broker, Joachim Schmidt.

Moellring said, "Junger has confessed that he and Schmidt are responsible for the fraud and that the Hungarian National Bank was not involved." An international warrant for Schmidt’s arrest was issued earlier this year but he escaped and had probably left the country. Moellring said Junger exonerated the Hungarian National Bank which was previously suspected of

aiding Junger and Schmidt with the fraudulent transactions.

Two of Junger’s former staff in VW’s currency department were arrested in June and August on suspicion of involvement.

The fraud was exposed in February when the Hungarian National Bank refused to honour a fake contract to buy currency from VW at a specified date and value.

The bank said it was aware its name had been misused “in certain fraudulent contracts,” adding, "We deny any kind of misconduct on our part.” VW said in March that the fraud involved "hedging" against currency movements at a time when the dollar was stronger on the international money markets than at present.

Large international companies often protect themselves against exchange rate fluctuations by contracting to buy and sell currencies at a future date at an agreed price. ’