Construction company halts work despite overpayment

The advance payments are contractually fixed as a percentage but do not correspond to the performance. I am thus making an advance payment, naturally assuming that construction will continue and that the advance payment will be offset. If Mr. xxx, contrary to the agreement, does not continue construction, he has thereby gained financial advantages and deceived us. This constitutes fraud. I have fulfilled my obligations; he has not.

No, he only deliberately stopped the construction. No fraud. If the good man had stopped the construction a week earlier, you would have had to pay just the same!!

he gained financial advantages from it

No, he personally did not gain any financial advantages because the money ended up in a GmbH.
You don’t know what happened with the money. Maybe he had to make an advance payment somewhere himself. (For whatever reason). Or paid invoices. You are assuming an insolvency, so the money must have been spent.

Are you seriously(!) suggesting the guy was so stupid as to transfer the €40,000 to his private account? Seriously?

I’m keeping my fingers crossed for you and wish you good nerves. And define for yourself what you want to achieve. Finish building the house? Get back as much money as possible and then see how construction continues (or doesn’t continue)? Or damage that guy Max? Doing everything at once won’t be possible.

oh dear is getting worse and worse.

Do not neglect your building. If only the basement is standing now, then cover it well so that no water can come in from above and freeze, otherwise you might have to demolish the basement before continuing construction. If there is water inside, then pump it out!