Going Deutsch with Tycoon Thomas

Herbert Unewsky, a reporter for the mainstream German weekly Stern, says his sources have told him the bulk of the money Kramer invested here is derived from the profits of a Swiss-owned company called Security Printing; Kramer has denied that connection, he adds.

"Otto and his lawyers say they gave the money to Kramer to work with and later pay back," Unewsky explains. "But Kramer told me several months ago that a lot of his money comes from bank loans."

The overseas publications report that the Swiss company was originally owned in part by Giesecke & Devrient, but that firm sold its shares to Otto after a 1972 change in German tax laws. Although Otto has filed income tax returns each year, he has never reported his ownership in Security Printing, the stories state. Security Printing reportedly sold currency-manufacturing equipment to Eastern European countries, and vehicles and luxury items to Africa. Stern also reported that Security Printing may have trafficked in dual-use chemicals -- substances that can be used to manufacture chemical weapons -- an allegation German authorities are said to be looking into. (Otto has denied any involvement in weapons trafficking.)

German officials are not likely, however, to pursue Thomas Kramer's alleged involvement in the tax-evasion scheme; once Otto paid his fine, that matter was closed.

When told of the reported arrangement between Otto and Kramer, a tax expert at the German Embassy in Washington, D.C., said German law generally holds only the actual owner of a property A Otto, in this case A liable for tax purposes. "Whatever I say is an opinion," cautions tax attache Dieter Eimmermann. "In a complex case like this, you can't be sure. But there was obviously an [agreement] between these two people that the developer [Kramer] would invest the money, probably in his own name, but on behalf of the other person [Otto].