A prominent German businessman has been deported from Cambodia and subsequently taken into custody in Germany on suspicion of fraud in a scheme allegedly involving some €1.2 million (almost $1.5 million).
Robert Schmalohr, who headed an investment company in Cambodia to set up a string of businesses dominating Street 174, or “Sabay Sabay” street, was deported on February 15, according to Uk Hai Sela, the head of investigations at the Ministry of Interior’s Immigration Department.
Hai Sela said he had no knowledge of the allegations, only that Schmalohr’s passport had expired and he was arrested by authorities for overstaying his visa.
Thomas Poggel, spokesperson for the Arnsberg district court prosecution in Germany, said two German police officers flew to Cambodia on Thursday and arrested Schmalohr on the airplane bound for Europe.
“Strong suspicion [of a crime] was found here. The district court, which issued the arrest warrant, also verified the strong suspicion and confirmed it,” Poggel said.
Schmalohr, who established the hotel and nightclub Valentino’s among other businesses on the street, is now on remand in custody and his case is before the court in Arnsberg.
Poggel said Schmalohr had yet to be charged, but he was arrested on suspicion of “commercial fraud in a particularly serious case” related to his company, eVision Team Networking.
As of mid-2016, German authorities were investigating at least 357 cases of investment fraud by eVision.
According to a July 2016 press release from the Arnsberg public prosecutor and Dortmund police, the company promised a 48 percent return on investments after 14 weeks by investing in international sports bets, “which always yield reliable returns due to a new computer programme”.
The authorities suspected the business model was a pyramid scheme, where the interest paid was exclusively sourced through the money of new investors, and they found a six-figure sum of the €1.2 million invested had been transferred abroad.
If convicted, Poggel said, Schmalohr could face between six months and 10 years in prison. Schmalohr’s lawyer, Robert Kain, declined to comment.
Valentino’s general manager, Rothanak Sovan, yesterday said he had taken over the company in Schmalohr’s absence, although he knew nothing of the German fraud allegations.
“His company is already gone, so it has nothing to do with him anymore. It is under my control,” Sovan said.
Rumours swirled on expatriate social media sites over the past week alleging Schmalohr had been involved in child trafficking – an allegation Sovan was quick to deny.
Sovan confirmed that up to 10 children, two girls and eight boys aged between 8 and 16, had been housed in or otherwise assisted by Valentino’s hotel arm, but he stressed the accommodation was altruistic.
He said the children were rescued from a local orphanage – which he would not name or provide an address for – that Schmalohr financially supported, and they were provided with accommodation, food, language education and music lessons at Valentino’s, in a separate suite to general customers.
“People think wrongly that Mr Robert has done bad things to the kids, but he hasn’t done anything bad – I’m sure, 100 percent,” Sovan said.
“In the beginning when they came here, they are not very healthy . . . After that, under our responsibility, [they were] very safe, very healthy, [they had] lots of fun.
“Mr Robert is not here anymore and we cannot support them anymore. It was heartbreaking, everyone crying. But what can we do?”
Sovan added the parents were permitted to visit their children in the hotel, and that they were attended to by nannies, all of whom had background checks, at all times of the day.
James McCabe, executive director of the NGO Child Protection Unit, said he had received no complaint, notification from police or any other intelligence to suggest Schmalohr was involved in child trafficking.
Additional reporting by Ouk Suntharoth