(LUXEMBOURG)
The Pillar [Washington DC]
July 18, 2025
By Jack Figge
Investigators are still seeking the masterminds behind the fraud.
Two men from Bulgaria were given jail sentences this week for helping to launder 61 million euros (around $67 million) from a Catholic charitable organization in Luxembourg to bank accounts in Spain.
On July 15, a court in Luxembourg gave both men sentences of 18 months in prison, with 15 months suspended. The court also ordered them to pay 3,000 euro fines (roughly $3,500), after they reached a deal with public prosecutors and cooperated in the investigation.
The two men agreed to a plea bargain over their participation in a months-long money-laundering scheme targeting Caritas Luxembourg, which plunged the organization into crisis and led to its restructuring.
Caritas Luxembourg may have lost the 61 million euros due to “fake president fraud,” in which a fraudster impersonates a senior figure in a corporation and demands an urgent payment from an employee to an account they control. The money was transferred from the charity to foreign bank accounts worldwide in installments of less than 500,000 euros between February and July of 2024.
According to court documents obtained by the Luxemburger Wort, the two men opened bank accounts in Spain and made them available to the scheme’s organizers. The prosecution deemed them “passive participants,” noting that neither had a prior criminal conviction. This resulted in their light sentence, agreed under a legal provision known as a jugement sur accord, where a defendant agrees to plead guilty to certain charges in exchange for a more lenient sentence and other concessions, such as avoiding a full trial.
The attorney representing the two men said they were vaguely aware their actions were illegal but did not know the full extent of the scheme. He argued that they were simply “money mules,” or people unknowingly used by criminals to transfer illegally obtained funds.
Currently, seven other men accused of being “money mules” face prosecution. The judiciary is investigating whether the seven could receive a similar plea deal.
Investigators are still seeking the architects of the fraud and do not know whether it will be possible to recover some or all of the stolen funds.
The fraud scandal shook not only the Catholic Church in Luxembourg, but also financial and political circles in the small country bordering Belgium, France, and Germany.
A special parliamentary inquiry into Caritas Luxembourg ended this month with the presentation of a report, which was adopted unanimously July 7. The report made 12 recommendations, including improving employee supervision and promoting the professionalization of the charitable sector. Critics claimed the parliamentary report shed little new light on the scandal.
Caritas Luxembourg’s former chief financial officer also faces charges as prosecutors argue that she had to sign off on the illegal transfers. The chief financial officer maintains her innocence, arguing that she was a victim of fake president fraud.
According to reports, the transfers were listed as going to a Turkey-based charity, a legitimate partner of Caritas with an annual budget of just 2 million euros. The transfers were said to require the electronic signatures of the financial director and two other members of the management team. The authorities have not confirmed the reports.
In October 2024, investigators turned their attention to a Bulgarian crime organization that they believe duped the chief financial officer into transferring funds through a fortune teller, in whom she allegedly confided.
The employee reportedly began consulting the website of a psychic operating in neighboring Belgium but based in Spain.
The investigative news website Reporter.lu said the employee divulged information about her workplace that the fortune teller then allegedly shared with organized criminals.
“According to information from Reporter.lu, the investigation is now targeting criminals of Bulgarian origin, who allegedly abused the psychological fragility of the foundation’s financial director and took advantage of the organization’s weak governance to steal 61 million euros in five months,” the website said.
Reporter.lu said around 25 million euros were believed to be in China, 10 million in Hong Kong, and roughly 8 million in Lithuania.
An October 2024 update issued by investigators did not comment on the fortune teller theory. But it did note that the investigation identified over 8,200 transactions carried out in “very short intervals to a multitude of countries around the world”.
Caritas Luxembourg, which was founded in 1932 and belongs to the Caritas network, filed a complaint in July 2024. The public prosecutor’s office then requested the opening of a judicial investigation into suspected forgery, fraud, breach of trust, and money laundering, among other crimes.
In July 2024 the office said that an individual, believed to be the chief financial officer, had appeared for questioning and was arrested. The person was later released from custody.
The former chartered auditor Christian Billon was named head of a crisis committee charged with restoring the confidence of donors, the public, and the authorities in Caritas Luxembourg.
In August 2024, it emerged that two banks approved tens of millions of euros in loans for the charity while the suspected fraud was occurring.
In September 2024, Luxembourg’s Prime Minister Luc Frieden denounced what he called “a horrible fraud” and said that Caritas Luxembourg would be replaced by a “new Caritas.”
Later that month, Billon announced the creation of a new entity to take over most of Caritas Luxembourg’s domestic activities. The non-profit Hellëf um Terrain (Help on the Ground) began work in October 2024.
Caritas Luxembourg later announced the closure of its overseas aid projects. But Luxembourg’s development minister Xavier Bettel said efforts were underway to salvage some of the projects.
In January 2025, the public prosecutor’s office announced the arrest of eight suspects after a joint police operation in Bulgaria, France, and Britain. A ninth person, from Bulgaria, was detained later that month.
The investigation remains ongoing as investigators searched the offices of Grant Thornton, the auditing firm used by Caritas Luxembourg, in June 2025.
Also in June, the Archdiocese of Luxembourg announced that the Fondation Partage Luxembourg, a Catholic organization accredited by the country’s foreign ministry, would take up on a temporary basis the overseas aid work that Caritas Luxembourg was forced to abandon.