Was bank aware of "Junk real estate"?

Munich, Germany
January 6, 2001

by Matthias Heinzel

At the Hypo-Vereinsbank in Munich Dr. Reiner Fuellmich is hated. The Goettingen lawyer represents 4,500 small investors who were scammed with inferior real estate deals, many of whom are now ruined: their purportedly profitable investment brings in no income from rent, but they still have to make payments on their loans. Most of the dubious deals were financed by the Bavarian Hyptheken Bank, which later merged with the Vereinsbank. Fuellmich alleges that the banks knew very well that the "junk real estate" was not even worth half the value that their customers would have to pay. The response from the Hypo-Bank and other institutions: they are not the ones responsible for the faulty financial advice, the operation that made the ruinous real estate available to the public is.

The same model was used for each deal. Half of the "completely financed total expenses" were really hidden fees and commissions for banks and businesses. In other words, the real estate was worth, at most, half the value that the investors had to lay out. For the past three years Fuellmich has been gathering evidence about the deliberate participation of the banks in the dirty deals with the inflated fees. For instance there is the report on file about the meeting with the Bavarian Hypo-Bank of Wuerzburg on February 6, 1996 when marketing of property in Luebeck stagnated. In order to give sales a boost, Goettingen real estate businessman Bruno Briese offered a Concorde flight from Paris to New York for the five or six best salespeople.

But the Hypo-Bank also stimulated business in their own ranks. As early as November 1989, the Speyer branch of Hypo was encouraging its staff not to restrict themselves, i.e., changing from a "moderate" operation to a "structured" operation. In the meantime Fuellmich has also obtained evidence that the Hypo-Bank intentionally directed the structured operation from whose fraud it is now trying to detach itself. For instance the Hypo-Bank trained some of the loan and real estate agents itself, at other training sessions bank staff were present. Fuellmich even knows of cases in which bank employees were engaged as agents in the inferior real estate deal in the bank building itself.

Finance sharks with a mission

The targeted distribution of leaflets on the second Christmas day was not the first of its kind. Attempts had already been made to defame Goettingen attorney Dr. Reiner Fuellmich in the "Heilbronner Nachrichten" newspaper, formerly known as the "Heilbronner Gegenstimme."

The first leaflet distribution in Goettingen was by the "Gegenstimme" which appeared as the "mps mobilpress Verlag" in Stuttgart on March 28, 1999: On that day Fuellmich was holding an informational meeting in the local hall for small investors who had been driven to ruin by the real estate deals. At the entrance and in the hall, the "Gegenstimme" was handed out to participants. The front page had the headline, "A businessman defends himself - or - how Attorney Dr. Fuellmich gets a golden parachute by ripping off investors with the help of a handful of journalists." The allegedly wronged businessmen are Heilbronn real estate sale people Hans-Juergen and Friedbert Schaul who, subsequent to a decision by the Frankfurt Superior State Court, may be described as "finance sharks" and "string-pullers of money-eating trust models." Most of the dirty deals were done through their offices.

There have been connections between the Schauls and the dubious Heilbronn publication for a long time. To this newspaper has been made available comments on file from the Baden-Wuerttemberg state criminal investigation office from July 1995 on the questioning of Gerd Zimmermann, lead editor for the "Heilbronner Nachrichten." In them Zimmermann admitted that he "had come up with a concept for the Schaul Bros. as to how they could best present their technical competence in the press." The state investigator's minutes comment on Zimmermann's statement, "He personally placed the fee for his work on account with the Innovatio Co. (a Schaul company - the editors). Upon questioning, he did not want to make a statement as to the amount."

Real estate sharks and the Scientology Swamp

The campaign against Goettingen attorney Dr. Reiner Fuellmich is primarily explained by the enormous amounts of money involved in the legal dispute Fuellmich is dealing with: The Hypo-bank alone dealt in volumes of from 40 to 50 billion marks in the dirty real estate deals. Finally, the "Heilbronner Nachrichten" publication uses data from Fuellmich's tax returns to make an association with the Scientology sect.

Fuellmich proceeded at great length primarily against the Hypo-Vereinsbank, with offices in Munich, and the controversial Heilbronn real estate sales person Hans-Juergen and Friedbert Schaul: by financing the inferior real estate, Hypo-Bank led ten thousand small investors to ruin, the Schaul brothers organized the operating companies whose staff lured customers. The extent of the shady business is gigantic: The Hypo-Bank commented that it financed about 108,000 of these "trust models."

Things started getting tough for Fuellmich, who says he represents about 4,500 people who have suffered real estate losses, at the end of 1997. The attorney won several legal proceedings against Goettingen real estate salesman Bruno Briese, who worked with the Hypo-Bank and the Schauls, and which got the Briese group into financial difficulties. Briese distributed an anonymous letter dated June 10, 1998, which accused Fuellmich of using the money from small investors to fill "Scientology's war chest." After that Schaul's Innovatio company and "Heilbronner Nachrichten" Gerd Zimmermann's mps office took over the defamation work.

Especially damaging for Fuellmich was the television report "Das Netz" broadcast on ZDF July 28, 1999. Without producing any evidence of a Scientology connection, Fuellmich's picture was repeatedly shown overlaying sect writings. Fuellmich's opponents from Schaul's group of people, Hans-Juergen Schaul himself and the commentator accused the attorney of knowingly or unknowingly cooperating with the sect.

The libelous campaign was brought to an end by the Hamburg State Court with its judgment of October 20, 2000: a cease-and-desist order was issued to prohibit distribution of statements that Fuellmich was associated with Scientology thereby violating his personality rights; the broadcast was not permitted to be shown again. In addition the court found that the ZDF show was a one-sided report although the court did not clarify that. However Fuellmich let drop in the court's determination that he, in the battle against his opponent, sent some documents which Scientology also used against its adversaries. The judgment, a positive one for Fuellmich, was immediately turned around by his opponents. In mid November in the "Heilbronner Nachrichten" appeared a report against Fuellmich in his home town of Nikolausberg which stated only the part about the attorney's alleged Scientology methods. The pamphlet did not contain one word about the cease-and-desist order. Also on the second Christmas day in the "Heilbronner Nachrichten" Fuellmich's tax data again appeared with the Scientology accusation. As "source" the paper gave an internet page which could not be found.

The libelous distribution of protected tax data for the purpose of defaming an individual citizen was not an accident: the victim, Goettingen attorney Dr. Reiner Fuellmich basically brushed banks and real estate sharks the wrong way. Fuellmich, with only a few other attorneys in the whole German Federal Republic, are taking steps against the seemingly powerful Hypo-Vereinsbank, with offices in Munich, and other major banks which have been financing inferior real estate at inflated prices since the mid-1980s, ruining investors. The German Supreme Court could still put a stop to the practices of those banks with a precedential decision this year.


New Evidence

Munich, Germany
August 1, 1999 Spiegel 29 1999

There is new evidence in the scandal over the dubious real estate business of the former Hypobank, which has since then merged with the Vereinsbank. The Hypobank was accused of having bilked tens of thousands of small investors since 1989. The customers were talked into buying "bank-reviewed real estate" with guaranteed rental profits. Nothing, however, came of the rental guarantee; many buyers racked up high losses. In doing this, Hypobank worked closely together with high pressure salespeople in a distributed sales business. The salesperson who closed the most loan agreements had a choice of flying either to Mauritius or New York. "Don't set any limits for yourself!" wrote the Hypobank to its sales agents, "you'll be rewarded." The bank said that it had had no contractual connection with the distributed sales business. "The salespeople had been hired only as supplemental help for the bank," countered attorney Reiner Fuellmich, who represents 3,500 victims. Hypobank, according to witnesses, had also paid the sales people 0.5 commission on the sum of the loan, which the bank disputes. Besides that they are alleged to have known about the 18.4 percent hidden "internal commission" which all earners had to pay to to a trustee. "Hypobank was obligated to inform their customers of that," said Fuellmich - a claim of liability. Meanwhile 7,000 victims have demanded retroactive dissolution of the contracts with Hypobank and other institutions. If their request is granted, the HypoVereinsbank, which acquired Hypobank in 1998, would have to write off about 200,000 marks per person - all in all several billions.

Asylum for a Fallen Angel

Munich, Germany
June 23, 1999
Sueddeutsche Zeitung, Feuilleton

The work of Gottfried Helnwein, the photo-realist [painter], is on exhibition at the Dominican Church.

Tolerance was never a virtue of the Dominicans. They have been called "Domini Canes," the (blood) hounds of the Lord, through centuries of speaking with a clerically critical tongue as well as through religious piety: these were the witch hunters and the heretic burners, those for whom the Faith was all, as long as it was just and Catholic.

So there is a special meaning when now, in a Dominican church, one presents his work which the zealots, as a token of political correctness, have branded a heretic, a monster and an apologist of totalitarianism, slandered as a high priest and spreader of Scientology, which in the view of modern Dominicans would also make his art worthless. Although the Federal Constitutional Court in Karlsruhe verified for him that nobody has to be subject to such gossip, not even an Austrian. Nevertheless, after twelve rather good years, the zealots drove him out of Germany: Gottfried Helnwein, the gifted protagonist of spiritual darkness with the revealing meticulousness of a photorealist.

Helnwein's latest work is now on exhibition in the Dominican Church in a cultural, highly active little industrial city which everyone knows as a wine region on the Lower Austrian Donau. There at the Donau festival this year, someone came up with the idea of inviting Helnwein as a long-lost son and dedicating the big art exhibit to him. Not that Helnwein feels like a long-lost son, although he was once driven out of the Academy of Performing Arts in Vienna. Many Austrians now view it as a loss that nothing more of note has appeared from this man in his homeland for the past fourteen years.

The show at the sacred place follows the spiritual motto of the "Apocalypse." The central exhibition is the "Fall of the Angels" in front of the church's choir, the monumental photograph of a prepared foetus from the collection of the pathological museum of Vienna, seven by ten meters on the front of a sermon room, moving in its simplicity. Digitally enlarged for the massive conversion hall, the photorealistic painting, "Ephiphanie one and two," confrontations of a mother-child self-presentation in front of a merrily uniformed crew of Nazis.

Helnwein's greatest fear was "whether I would force the room, in the sense, that I would not fail there." It is said to be not only the most magnificent, clear dimension of this location of sermon and prayer, it is also the weight and the magic, even the history of this place which one has to perceive: triumph and grief, ecstasy and doubt, enlightenment and fanaticism.

There is "Rammstein," a cycle from last year: Austrians bite their knuckles viewing the distorted physiognomies tied up with masking tape. It works like art of the times, coined from the political glimpse: Marcus Omofuma, the Nigerian, the refugee who died packed up this way when he was being brought out of the country. No church asylum with the Dominicans. Death by suffocation. Helnwein does not see himself as a prophet, but many who see this picture do. "Artists are often puzzled by their own prophecies," said Helnwein.

In Austria, one encounters with respect the emigrant who lives in Ireland today, and with admiration for his success and with pride for another "world class artist," which the country has brought forth. In the matter of Scientology, to which entire books have been dedicated, nobody brings it up. Even Helnwein's work no longer results in scandal. Peter Weibel, curator of the Austrian contributions to the biennual art festival in Venices, spoke of Hunderwasser, Heller and Helnwein. "A very popular triumvirate," Weibel told the "News" magazine, "the successful one new artist type is established in the era of the landscape of events and culture of spectacles: namely the exploitation artists." The three exploit art and the public for their own purposes and "counterfeit art in the name of art."

Returning home to a different country? Krems, said Helnwein, is certainly not Vienna, but is milder and more sensual. However he is always thankful for the gossip, since that has forced him to move again and start a new life, and has prevented him "from becoming fat and smug."


"Apokalypse", until 31 August in the Dominican Church at Krems.

Film Industry

Scientology Problem

Munich, Germany - March 15, 1999

SPIEGEL 11/99, p. 92

The Munich film distribution company, Intertainment AG, which has recently been quoted on the stock market and is looking for high returns there, has now closed a deal on some hot items in the USA. Besides films with Julia Roberts and Richard Gere, the extensive rights of the Hollywood company, Franchise Pictures, which covers 13 productions for $150 million, include the work "Battlefield Earth." In the filming of the novel by Scientology Founder Ron Hubbard, professed Scientologist John Travolta appears as co-producer and lead actor. Rivals such as Telepool or CLT-Ufa passed up acquisition of the rights; the distribution of the Hubbard film in theaters and TV includes a "potential risk," a spokeswoman for Intertainment AG also said. For company founder Ruediger Baeres, however, who brought the company up to industrial size within a short time thanks to a 100 million mark loan by the Bayerischen Vereinsbank, the latest deal is to be a breakthrough.

Has the Octopus already got a hold?

Letter to the Editor

Munich, Germany
February 19, 1997
Sueddeutsche Zeitung (SZ)

In response to the articles "Caught by Scientology" by Herbert Riehl-Heyse and "In the Hundhammer's footsteps" by Hans Holzhaider in the SZ editions of February 5 and 6:

I read their articles with interest and noted a surprising common tendency: the SZ is playing the part of legal advisor or overt partisan in representing the interests of Scientology. Of the two, the article by Holzhaider was less disturbing to me. Bavarian editors have never exactly been captivated by their comrades', Stiller and Holzhaider's, research or facts; their main thing was and still is somehow taking action against the Bavarian government.

Whether or not Helnwein openly admits to being a Scientologist, there are sufficient facts which show that he has lent his name to the interests of Scientology. The Bavarian editorial staff should not change what it is doing, but continue to chastise the state administration and the CSU. They've had practice at that, and won't hurt anything by doing so. That is more rewarding besides, and the CSU continues to set itself up, like the "Biermoesl," etc.

I find the article by Riehl-Heyse to be more objectionable though, because, in my eyes, he usually does an outstanding job at journalism. Even if he assures us in his introductory paragraph that the SZ is not in the clutches of Scientology, after that article I think that doubt is appropriate. The article, on the whole, is an intellectual slalom race with constant "yeah buts" or "but yeahs" and ends with the appeal to deal with an institution in a "civilized" manner, so that institution will treat its staff who want to leave in a "civilized" manner. Yes, one presents a person as a "fervid defender" of people (was Helnwein meant by that or perhaps Hubbard?) whose anti-civilized dealings are rejected. And do that after Riehl-Heyse has accused the Bavarian government of obstruction of justice in the legal dispute with Scientology. When it is the state government alone who is presents the situation openly and states what the situation is, and has to take the international beating for it.

I, a reader of the SZ for decades, hope that the SZ still stands for "Sueddeutche Zeitung" and cannot be interpreted as the "Scientology Zeitung [Newspaper]" - or has the octopus already gotten a hold?

Graduate Economist Rainald Meier, Woerthsee

The SZ*, surprisingly uncritical

Munich, Germany
February 6, 1997
*Sueddeutsche Zeitung ("SZ")

In reference to the article "New Taboo Zones for Scientologists," the first surprising thing is the obvious fact that the otherwise soberly critical SZ (this newspaper, the "Sueddeutsche Zeitung") believes Helnwein the Austrian painter when he says that he is not a Scientologist.

Research by journalists from other media yielded several weeks ago that Helnwein numbers among the leading Scientologists. On January 14, 1997 in the USA, Scientology itself revealed that he belongs to that organization. The Interior Ministry also has information which is condemnatory in this regard which gives evidence that Helnwein is an influential, long-term member of Scientology.

In addition to that, the article and the commentary, unfortunately, provided none of the on-going contextual discussion about Scientology. Nevertheless, we completely unanimously agree with the attitude that the government should have no interest in whether an artist is a communist, a Freemason, Scientologist or member of the CSU. Neither is an assessment of Helnwein's artistic quality part of the debate. A wholly different matter is the question of whether state institutions use public tax money to subsidize members of totalitarian organizations which include not only leftwing or rightwing extremist parties and groups, but also Scientology. It would not pass muster for the state to recognize a danger from a certain group on the one hand, yet contribute to its finances on the other. Would the SZ approve of it, for example, if the Bavarian state government subsidized selected neo-Nazis with the argument before us?

In closing, please permit me to make the following comment: during the past few weeks, the "Sueddeutsche Zeitung" appears to me to have critically concerned itself mainly with the 15 point list of measures by the Bavarian state administration, while the Scientology system of human contempt has as good as not been mentioned. While other media in Europe and worldwide have had stories about the psycho-practices and Scientology reform camps which are documented by reports of former members, that has hardly been mentioned in the SZ. As I have found in several meetings, that has also been diligently recorded by the various media.

Christoph Hillenbrand
Press spokesman of the Bavarian
State Ministry of the Interior

In the Footsteps of Hundhammer

The state government has requested that no Bavarian communities support any event "which is associated with an advertisement for the Scientology Organization." One example of such an advertisement, the recommendation continues, may be "presumed when internationally known celebrities (appear) who openly profess to Scientology."

Openly professing to Scientology, however, is exactly what Gottfried Helnwein, the painter, does not do, on the contrary. He publicly says, "I shit on Scientology." He has filed a Constitutional complaint against a court decision which stated that he may be described, without consequence, as a Scientology "auditor." He has protested in writing to the American Church of Scientology about them describing him as a Scientologist against his will and using him in their press campaigns. How an exhibition with Helnwein's pictures may be an advertisement for Scientology under these conditions remains a secret of the Interior Ministry.

Neither is this about "the state" contributing to the "financing" of a totalitarian organization. It has much more to do with whether the state's (or a community's) granting a subsidy to an artists' association entails the right to dictate to that association which painters may have their work put on display and which not. The last time something comparable to this happened was in 1949 with Bavarian Cultural Minister Alois Hundhammer, when he plotted to have Werner Egk's ballet "Abraxas" taken off the schedule of the Bavarian State Opera. The reason: he refused to "have such things presented at the cost of the state." If the argument is not about the artistic quality of Helnwein's pictures, but about the character of the painter, then one would also have to forbid the Munich Philharmonic orchestra from playing works by Richard Strauss, for example. Under the Nazis he constantly led the Reich's music chamber.

Finally: if there really were a neo-Nazi who painted exciting pictures which have high artistic value, then he, too, should be able to put them on exhibition at an association which receives state subsidies, provided that he does not use the exhibition as a platform for Nazi propaganda. Anybody who has had a look at Gottfried Helnwein's work and asserts afterwards that these pictures glorify totalitarian ideas is either blind or malicious.

Hans Holzhaider