Insolvency fraud

Publication date 28-02-2025, 11:36 | Last update 28-02-2025, 11:36

In the Netherlands, thousands of companies go into liquidation every year. Often, this is due to financial problems. Some companies go into liquidation on purpose. That means that suppliers, customers or other creditors might lose their money. The FIOD investigates reports of all kinds of insolvency fraud.  

What is insolvency fraud?

Some entrepreneurs commit acts that disadvantage creditors upon, before or during a liquidation. For example, they divert money to bank accounts outside of the reach of the insolvency practitioner shortly before a liquidation. Generally, this is an attorney-at-law appointed by the court. The insolvency practitioner makes sure that creditors receive what they are owed as much as possible.

As an example, due to insolvency fraud, suppliers and staff can no longer be paid. As a result, this fraud causes a lot of damage. It is estimated that this kind of fraud involves hundreds of millions and even up to more than an billion euros a year.

Types of insolvency fraud

There are many types of insolvency fraud. Such as:

• Withdrawing assets: for example, by removing cars, machines or other valuable items just before a liquidation. Or transferring money to personal accounts outside of the reach of insolvency practitioners just before a liquidation.
• Favouring creditors: by only paying certain creditors. As a result, no money remains for other creditors.
• Not fulfilling the requirement to keep records or the obligation to provide information: for example, when an entrepreneur did not keep any administrative records or did not provide them to the insolvency practitioner.

What does the FIOD do to fight insolvency fraud?

Often, the FIOD investigates insolvency fraud after a report filed by the insolvency practitioner. Or in response to messages in the media or in cooperation with the Netherlands Tax Authority. The FIOD can search properties, arrest people and confiscate belongings. With these proceeds, creditors can be paid.

To this end, the FIOD cooperates with other financial institutions. Such as:

• Public Prosecution Service (OM)
• National Police
• Chamber of Commerce (KvK)
• banks and credit institutions
• Ministry of Justice and Safety (JenV)