The news earlier this week that prestigious law firm Pels Rijcken, which represents the state in legal matters in its role of state advocate, was the victim of a large-scale fraud by former managing-partner Frank Oranje, has left confusion and shock in its wake, the Financieele Dagblad reports.
Frank Oranje, who committed suicide last November, embezzled millions of euros from clients over a period of 10 years by transferring money to accounts outside the firm ‘in a cunning way whereby false documents were made to look legitimate’, the firm said in a statement.
The first signs of fraud were detected by tax fraud agency FIOD in 2019, the paper said, and Pels Rijcken was notified by the public prosecutor’s office in 2020. Oranje was immediately removed from his function and reported to the police by the firm.
Oranje never explained why he defrauded his clients and the money has not been found. Both the firm, which has since repaid the clients, and Oranje’s family have said they cannot fathom what his motives were and that there is no indication that he was being blackmailed or struggling with other personal problems.
‘The news came as huge shock,’ Annerie Ploumen, chairwoman of the the Royal Dutch Association of Civil-law Notaries KNB told the paper. ‘ It’s incredible and baffling. Every firm should now wonder if its house is in order. Fortunately this only happens to a small percentage of firms but it’s food for thought nevertheless,’ Ploumen said.
Leen Paape, professor of corporate governance at Nyenrode business school said that while it is shocking, it is not altogether surprising that a leading light like Frank Oranje was caught with his hands in the till. ‘It’s not uncommon for people high up in the hierarchy to stray. Look at Wirecard, for instance,’ he said.
‘If the chairman of the board can get away with stealing millons for years then obviously something is very wrong. It’s crazy that one person can be in charge of a bank account. There’s a whole administrative system propping that up,’ Paape said.
Pels Rijcken says that an investigation by Deloitte forensic experts has already led to concrete measures to avoid fraud. Payments of large amounts of money, for instance, will be checked with the recipient first.
The firm will also check if notaries are involved with foundations unknown to the firm. Oranje used foundations he established himself as a cover up. Third party accounts will be monitored by a compliance officer in future, the law firm said.
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