Fraudulent companies steal one billion euros from Austria annually
Fraudulent companies in Austria continue to cause significant damage to the social welfare and social insurance systems in the country, year after year. These companies exploit social benefits and manipulate the system, costing taxpayers billions of euros annually. According to the fraud prevention unit of the Vienna Chamber of Commerce, the construction sector alone loses about 350 million euros each year due to social fraud. Additionally, companies shift employee costs to unemployment insurance, creating another gap of 700 million euros annually.
In 2025 alone, more than 100 cases of fraudulent practices were reported. The Chamber of Labor in Vienna (AK Wien) was actively working to combat these issues, with its fraud prevention unit filing 50 complaints over several months. These complaints involve more than 470 employees and claims exceeding 3 million euros, which is double the amount reported in the previous year.
The complexity of fraudulent practices is increasing. One prominent case involves a network of companies in the real estate sector that have been systematically accused of failing to pay employee wages and not contributing to social security and other expenses. The main figure in this case, Lucas N, is the general manager of eleven companies, most of which are either bankrupt or fraudulent. These companies have a long history of transferring employees between entities to avoid paying wages properly.
Another case highlights a construction company that declared bankruptcy in July 2025. The Vienna Chamber of Labor filed for bankruptcy on behalf of 114 employees, but shortly thereafter, many of the same workers continued to work under a new company established at the same address with the same owners and managers, illustrating how these companies operate under the radar.
Ludwig Dvorak, head of the legal department at the Chamber of Labor in Vienna, expressed his concern about the increasing complexity of cases, noting that wage and social security fraud has become a business model for some companies, putting workers at risk. To address this, the Chamber of Labor in Vienna called for stricter measures, including higher fines, increased oversight, and better protection for employees against phantom work.
Social fraud by companies in Austria is expected to cost billions of euros, and Interior Minister Karni expects the damage from social benefit fraud to reach 23 million euros in 2024. However, Dvorak pointed out that if there were a similar clearance rate for fraud by companies, the state's financial situation would be better.