Lufthansa crews in euro scam: German prosecutor

(BERLIN) - German prosecutors said Thursday they had smashed an international scheme involving Lufthansa flight attendants smuggling scrapped euro coins back from China and cashing them in.

Once back in Germany, the cabin staff would then exchange the coins for notes at the Bundesbank central bank, the prosecutor's office in the western city of Frankfurt said, confirming an earlier report in the daily Bild.

Police carried out dawn raids at the Bundesbank and at firms in and around Frankfurt including at Lufthansa, the country's flag carrier, with six people detained on arrest warrants.

The suspects, four of them of Chinese origin, "are suspected of having acquired from one or more sources in China reconstructed one- and two-euro coins," the prosecutor's office said in a statement.

Investigators estimate that between 2007 and November 2010, some 29 tonnes of decommissioned coins were exchanged against some six million euros ($8.5 million) in cash.

Every year the Bundesbank takes out of circulation hundreds of tonnes of dirty, bent coins and breaks them into their separate metals, which are then shipped to China.

But the coins were then re-assembled by criminal groups which apparently hired four flight attendants, who are not subject to baggage weight limits, to smuggle them back into Germany, prosecutors allege.

The Bundesbank is the only central bank in the eurozone which allows the exchange of damaged currency for fresh cash, the prosecutor's office said. It said none of its staff was under suspicion of wrongdoing.

Authorities were alerted after a Lufthansa stewardess was caught by customs officers with thousands of one-euro and two-euro coins in her bag, Bild reported.

A company spokesman said some of its employees were targeted in the probe, without providing further details.