Giveaway millionaire exposed as conman
An Austrian millionaire who became an Internet sensation when he revealed he had given away everything in order to help the poor is really a conman who simply wanted to get publicity to sell his house and pay off his debts.
Media around the world rushed to cover the story of Karl Rabeder when he revealed how he had liquidated everything and had invested the money in a microcredit bank to provide micro-financing to people in Third World countries. He said he realised money did not make him happy and added: “I realised I was dying through consumerism. My cars and my plane have already gone – the rest will follow soon.”
In a world filled with greed and self-interest – he shone like a beacon of hope. A millionaire who realised that money was no longer making him happy – who sold his firm and his home and donated the money to the Third World. He had moved into a small alpine hut and planned to live on just a few hundred Euros a month. A Google search on his name comes up with 500,000 hits.
But in reality the 49-year-old had actually hired three top public relations agencies to get his message of philanthropy around the world, and he has since travelled the world for two years preaching his message of philanthropy as a guest on talkshows and other media – even writing a book with the title “Only People with Nothing Have Everything to Give”.
In fact his promises have not been kept, and in reality the whole scheme is looking more like a PR stunt designed to allow the financially struggling businessman to sell off his Austrian property via a lottery so he could pay his debts.
The public relations material sent out in March 2009 by the PR firms had the headline “Win a Dream Villa and at the Same Time Do Something Good.”
Property experts say the luxury Tyrol villa was probably not worth over 500,000 Euros, but by selling tickets and the massive exposure the plan attracted he had managed to sell 21,999 tickets for 99 Euros each, raising nearly 2.2 million Euros.
The winner – a woman from Bavaria – was announced in August 2010 and handed the keys. The magazine said that the money had certainly been put to good use – but not to good causes.
It said that in fact the only confirmed payment to a good cause had been a payment of 14,886.20 Euros that had been paid to the Austrian charity Light in Darkness and S.O.S. Kinderdorf – representing just 0.7 per cent of the total raised.
The PR companies that organised the stunt as well as lawyers pocketed 643,000 Euros, another 745,000 Euros went to pay off the mortgage.
He also had a debt in his firm. This was also cleared, although he denies money from the house was not used to do it.
Rabeder had earlier run up massive debts “living a champagne lifestyle” on the money that he got from the partial share in 2004 of his company selling living room accessories. At the time he was 42 years old and had regarded himself as officially in early retirement, and had purchased a second house in the South of France – and speculated on the stock exchange.
But with the crash in 2007 Rabeder lost vast amounts of money and tried at that time without success to sell his villa in Tyrol. Desperate for money – he had been forced to sell his villa in the South of France at a substantial loss.
By September 2010 after the successful sale of the Tyrol villa on the backs of massive publicity he had been able to avoid the insolvency of the remainder of his firm that he had not sold by coming to an arrangement with creditor banks to personally take over 510,000 Euros of debt. Contacted by German magazine Stern and asked if money from the sale of the house had been used for creditors he said no. Asked where the money had come from he said: “I had a few savings elsewhere.”
When pushed he failed to provide any documents. Today he makes his money from seminars and talkshows, cashing in on his fame as a philanthropist.
Media travelled to interview him, photograph and film him at the wooden hut he supposedly lives in on an alpine meadow – but whent reporters visited the property they found no sign of him. They said that the hut was not usable in the winter and had clearly not been lived in over winter. They also found evidence that the property had occasionally been rented out in the summer when he was supposed to have been living there as well.
Also under Austrian law – all residents in the country have to regiser their address. But he is not registered anywhere in the country – and in fact his last recorded contact address was a post box at the Vienna Millennium Tower, a 202 metre high tower block in the centre of the Austrian capital.
Asked how true his statement had been of investing everything he owned in micro-credits in Third World countries he refused to put an amount down on the table. He said: “I don’t want to state a sum. I will simply refer you to my original statement that I have given everything that I have.”
But this could be nothing.
His association MyMicroCredit (MMC) still exists, but no proof that any money from the house has gone there.
His online Internet platform has been in existence for two years (www.mymicrocredit.org) and has been gathering investment from private “social investors” offering interest-free miniature loans. Many private investors have also invested large sums of money with no strings attached including the publishing house that had printed his book.
Accounts have never been filed. But Austrian tax expert Professor Erich Pummer from the University of Innsbruck told the ORF that failing to file accounts was not an offence.
Rabeder said he had never added it all together because he had too little time. But he admitted there were thousands of social investors that had probably invested a few hundred thousand Euros. But the magazine said that the information it had, showed very little of the money from the social investors had gone to the preferred end Third World countries where it had been promised.
MMC Partner in El Salvdaor, the microcredit company “Apoyo Integral” said that they had not seen any money from him for a long time.
They said that they had forwarded 541 applications for loans from people in El Salvador and that of these 423 had appeared on the MMC page as being approved.
But in reality only 278 applications totalling 98,106 Dollars (currently 75,000 Euros) had actually been transferred up until June 2010. After that Rabeder stopped making payments even though he continued to collect money at least until the end of last year for the social projects he was claiming to promote.
The company said it had tried in vain up until April last year to get at least the remaining 46,000 US dollars that had been promised but without any result. He simply had not paid, claiming to have had problems with German civil servants.
He said he needed to change the legal framework of the company in order to get round the legal issues that had been raised but when questioned German officials rejected that there had been any difficulties.
Apoyo said that the payment difficulties have meant that they had cancelled their working relationship with Rabeder in July last year.
A member of the board of Apoyo told Stern: “We had grave doubts about the way he was operating his financial organisation.”