Lufthansa hostesses 'carted 29 tonnes of old coins in €20m Triad forgery scam'

GERMAN investigators have raided the Bundesbank and offices of national airline Lufthansa in what is described as the biggest euro-fraud since the single currency was introduced.

Police allege at least €6 million (5.3m) and as much as €20m (17.6m) worth of scrapped coins were sent to forgers in China where they were minted again and brought back to Germany.

Hostesses on board Lufthansa jets are alleged to have smuggled the counterfeit coins back into the Germany and exchanged them for paper currency at the central Bundesbank.

Although Bundesbank employees were quizzed, prosecutors said none are under suspicion of wrongdoing as media reports in Germany on Thursday initially suggested.

Flight crews have no restrictions on luggage weight; consequently the crime syndicate's flight attendant accomplices were able to smuggle back into Germany an estimated 29 tonnes of counterfeit coins, said police.

Private offices and residences were also raided in co-ordinated sweeps across cities and towns in the Rhine-Main area.

Six people were arrested over the fraud, four of them ethnic Chinese.

State prosecutor Doris Mller-Scheu said: "An investigation for putting counterfeit money into circulation is under way against the suspects."

The Bundesbank regularly takes out of circulation hundreds of tonnes of damaged or dirtied euro coins to be replaced with freshly minted ones. The process of destruction involves separating the cupro-nickel core from the coins' outer brass ring. The scrap is sold on - but in the past few years has been bought by an organised criminal gang that sent it to China where the coins were reassembled to become replicas of the originals.

If the metal had been shredded it would have proved impossible to put them back together - as it was, with patience and some soldering material, the Chinese forgers based in Shanghai were able to reconstitute the euros to seem as good as new.

The scam lasted between 2007 and last year.

In raids this week in Frankfurt, Offenbach, Fulda and Moerfelden-Walldorf some three tonnes of broken coins, a coin-welding machine and computers were seized.

When flown back every transaction to change the coins into paper was under €10,000. Anything more requires paperwork and customs' declarations.

Detectives were alerted to the fraud when one hostess was spotted coming through Frankfurt Airport at the beginning of last year pulling a trolley suitcase with great difficulty. A search revealed she had thousands of one and two euro fake coins in the case.

Following this an elaborate surveillance operation was undertaken involving police in Europe and China. The Chinese villains are said to have Triad links.

One prosecutor said; "It was a blindingly simple fraud and one which reaped high dividends.Safe to say the scrap value of the coins was far, far below their face value, which meant putting them back together again was a swift and almost effortless money-earner for the gang.

"At least four Lufthansa employees were in on it. But the probe is ongoing, there may be more arrests to follow."

Germany's K65 organised crime unit is in charge of the investigation. A spokesman said at least 25 more people are wanted in connection with the fraud.