The extensive scam involved around 120 large transactions executed over five months. Through a series of money transfers, 14 bank accounts in Spain were cleared. Ultimately, the scam led to major financial losses for the Catholic charity.

Luxembourg prosecutors revealed that criminals posing as Caritas executives directed fraudulent transfers. They exploited the vulnerability of the charity's financial director.

The fraudulent operation unfolded when impostors, pretending to be Caritas executive Marc Crochet, instructed Caritas Luxembourg's financial director to initiate transactions.

Authorities believe the director's connection to a clairvoyant was instrumental in the operation's success. The fortune teller is reportedly working with a criminal syndicate,

Investigations indicate that the clairvoyant, located in Belgium but operating from Spain, manipulated the financial director by exploiting personal and professional vulnerabilities.

Luxembourg media reports that the director shared confidential organisational details with the clairvoyant, including internal weaknesses and personal stressors. This sensitive information was allegedly relayed to the crime group, aiding the systematic withdrawal of Caritas funds.

Millions transferred abroad

Luxembourg's public prosecutor's office announced that more than €43 million from the charity's funds was diverted to accounts in China, Hong Kong and Lithuania.

Investigators have mapped over 8,200 individual transactions distributed across multiple countries. The volume of transactions reinforces the belief that a sophisticated criminal association orchestrated the scheme.

Caritas Luxembourg first reported the fraud on 16 July. This led to an extensive judicial investigation covering potential crimes of fraud, forgery, breach of trust and money laundering. Since then, a parliamentary committee has also begun examining the case.

The financial director implicated in the scheme voluntarily approached law enforcement over the summer and remains under investigation, cooperating with authorities to uncover further details of the criminal operation. The financial director argued that she neither initiated nor benefited from the fraud.

Luxembourg prosecutors have yet to confirm if any of the stolen funds can be recovered but stress the investigation's global scope and complexity.

Sources

Daily Mail UK

Luxembourg Reporter

According to the report, the Caritas Luxembourg Foundation is laying off around 30 of its 500 employees in the Grand Duchy. In addition, 70 more jobs in South Sudan and Laos are to be cut, according to the report. More than 60 projects will be cancelled.

The archdiocese did not detail the figures in its press release. Instead, it emphasised that creating a new structure had made it possible to continue charitable activities in Luxembourg.

An "unprecedented case of fraud" and a resulting "deep crisis" had jeopardised the continuation. The solution that has now been found will enable employees to continue working unabated at a national level, it said.

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The Catholic charity is a member of Caritas Internationalis - confederation of Catholic relief groups. It is one of Luxembourg's largest charities.

Caritas Luxembourg says it is providing counselling for its almost 500 employees. They are "deeply shaken" by the scandal Caritas says.

The theft

Caritas Luxembourg's director general Marc Crochet says when the financial loss was discovered, Caritas had just 28 million euros in the account.

That is about half the money we need in the year to function, he explains.

"And the 28 million euros that were there were not our money either. That was about 25 million that belonged to the Luxembourg state and other donors."

He discovered 33 million of the missing 61 million euros were in credit and loans taken out in Caritas Luxembourg's name.

"The only thing I knew for sure was that someone was about to rob us" he says.

Once he saw how the money had been stolen however, Crochet says he had a good idea as to who the thief was.

"And I could actually just connect the dots and say: I know that person."

The public prosecutor's office has since said a person was arrested after turning themselves in for the theft on 22 July.

Accounting form PwC Luxembourg will be conducting investigations to uncover the facts.

At the same time, the crisis committee will make the necessary decisions "to restore the confidence of donors, the general public and public authorities in the entities" Caritas Luxembourg says.

Outrage expressed

Government officials are furious about the theft. A national debate rages about overseeing charities receiving state funds.

When he heard about the lost funds, Prime Minister Luc Frieden said Caritas would not receive "a single euro" more amid the scandal.

The Catholic charity with the big international name had been receiving state money to help provide services for the country's homeless and refugees.

Another government minister said the "sickening" theft will impact "the poorest people in Luxembourg and in the world".

Theft casts big shadow

The charity's announcement could hardly have come at a worse time.

The scandal emerged weeks before a scheduled papal visit to the 700,000-citizen Catholic-majority country.

Francis is due to make a daylong visit to Luxembourg on 26 September, meeting the prime minister, head of state Grand Duke Henri, the Catholic community and Jean-Claude Hollerich who serves as the synod on synodality's general rapporteur.

Auditing underway

While continuing to serve Luxembourg's people in need, Caritas is negotiating with banks regarding its short-term financial needs and cooperating with the judicial authorities.

An auditing firm has volunteered to assess Caritas' financial procedures "and to identify and change any technical and/or human shortcomings" a spokesperson says.

"These findings will undoubtedly shed light on how a misappropriation of funds on this scale, and over a period of nearly six months, could have been possible."

Source

• Pillar