Breaches of Trade Regulations and Competition Law – Assignment from a Business Consortium

Lack of Mutual Loyalty within a Corporate Consortium?

A business consortium, comprising various companies, primarily civil law partnerships, approached Kurtz Investigations Cologne because there was suspicion that one of the members was acting in a manner that violated competition rules with respect to another member. Specifically, there was a suspicion of contractual breaches involving the poaching and employment of subcontractors who might be working on construction sites in and around Gummersbach in the Oberbergischer Kreis. Additionally, the classification of the workers as subcontractors was highly questionable from a social insurance perspective, and our client, Mr Knapsack, also suspected violations of trade regulations, as the company under investigation was not registered with the relevant Chamber of Crafts for full crafts work, yet appeared to be performing such tasks.

 

These three points of suspicion were already sufficiently concrete that the commissioning of our detectives in Gummersbach was aimed less at clarification and more at obtaining evidence admissible in court. It should be mentioned that Mr Knapsack, as the representative of the business consortium, had personally encountered the subcontractors in question at a construction site of the target company prior to commissioning Kurtz Economic Detective Agency Cologne.

Extensive Prior Information Simplifies Detective Work

As complex as the case appeared – involving multiple companies, target individuals, points of suspicion, and a consortium at the top – the investigation work ultimately proved straightforward because many factors that would normally be variables were already known. One such factor was that the three target individuals, all from Romania, were still living in the same workers’ accommodation as during their employment for another company within Mr Knapsack’s consortium. This address provided the first starting point for our economic detectives in Gummersbach: at five o’clock in the morning on the first day of surveillance, the two deployed investigators arrived at the residence and began observation. The shutters were still closed, and work shirts hung on a clothesline on the terrace. By 7:30 a.m., no relevant activity had been observed, so one of the two surveillants moved to the known construction site and later – since nothing occurred there either – to the suspected company. While the detective could hear work noises from the production halls, no concrete evidence of the target individuals’ presence emerged.

 

To pursue a new lead, our private detective returned to the residence in Gummersbach to continue observation, while his colleague conducted a scripted enquiry with local residents.

Resident Interviews Confirm the Targets’ Living Status

As is typical on weekday mornings, most households did not respond to the detective’s doorbell. However, in a multi-family building two doors away, the detective was immediately successful: three male residents from different apartments independently confirmed the following points to our detective agency in Gummersbach:

• The residents of the target address were “workers” from Romania.
• They were always seen walking to and from work, despite having vehicles.
• They worked for the target company of the present investigation.
• They had been known locally for some time and, apart from the Christmas period, stayed permanently at this address in Gummersbach.

 

One of the three also reported having seen the group the day before.

 

After consulting with Mr Knapsack, our two detectives continued observation of the residence in Gummersbach. Nothing relevant occurred until late afternoon. Then a vehicle with Romanian registration arrived; two men with light luggage, dressed in neutral clothing, entered the building, after which the shutters were raised. The third target could not be identified. It appeared we had coincidentally chosen a rest or arrival day for our surveillance. In consultation with Mr Knapsack, observation was concluded at 6 p.m.

Indirect Detective Conversation with a Target Individual – in Romanian

Since Mr Knapsack had only a limited budget for clarifying the reported irregularities within his business consortium, Kurtz Investigations Cologne in Gummersbach changed approach for the next operation: rather than observation, further scripted interviews – this time directly with the target individuals – were intended to provide clarity. A Romanian national living in Germany, unknown to the targets, was recruited as an accomplice and thoroughly instructed to approach the targets with an investigator and extract information through conversation. The hope that the Romanian workers would cooperate was reinforced upon approach, as a company sign at the entrance of their residence displayed the name of the suspected company and the three target individuals. One of the men was behind the building washing a vehicle with Romanian registration. The detective’s accomplice spoke to him in Romanian, explaining that he was looking for accommodation nearby as he would soon be on assignment in the area. The friendly conversation lasted about five minutes. After departing, our accomplice summarised the conversation for our Cologne detective in German:

 

The target openly admitted to having worked in and around Gummersbach for years and confirmed that the current employer was the target company, for which the trio had been working for approximately one year. Our accomplice was even able to obtain a detailed description of their activities. These findings made our informant a key witness should the matter proceed to court. The operational management of our economic detective team in Gummersbach informed Mr Knapsack of the interview findings. He was so satisfied that he concluded the assignment. While Kurtz Detective Agency considered further interviews and observation to consolidate results, the business consortium had sufficient basis to enforce contractual penalties against the target company.

Note

To protect discretion and the privacy of clients and target individuals, all names and locations in this case report have been completely anonymised.

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