A Group of VAT Frauds and Money Launderers Stopped

 Publicēts: 17.10.2018. 09.08

Apakšsadaļu izvēlne

This August, the officials of the Tax and Customs Police Department (hereinafter — “TCPD”) of the State Revenue Service (hereinafter — “SRS”) stopped the criminal VAT fraud scheme which involved seven actually operating companies and at least 50 fictitious companies. The amount of losses caused to the State budget is approximately 2 million euro. One person was arrested within the framework of the initiated criminal proceedings.

The criminal scheme was operating from January 2016 to June 2018. The persons involved avoided value added tax (hereinafter — “VAT”) payments as well as carried out money laundering, thus causing losses of approximately 2 million euro to the State budget.

During the investigation, it was established that interrelated persons had created chains of company transactions. The criminal offence was implemented in the field of trade of electrical goods, by including in input tax the transactions, in which the goods sold included computer SSD hard drives, in transactions, in which the reverse VAT payment procedure is not applied.

 The criminal scheme involved seven actually operating companies and at least 50 companies with indications of a shell company. For these purposes, citizens of Belarus were mostly registered as the officials of Latvian companies.  In turn, money laundering occurred by using current accounts opened not only in Latvian, but also in Czech and Polish credit institutions, thus hiding and masking actual beneficial owners.

Within the framework of the initiated criminal proceedings, SRS TCPD employees carried out 35 searches at the places of residence of the persons involved in the criminal proceedings, in cars, offices and warehouses. During the searches, evidence crucial for the criminal proceedings was found and seized: seals, Internet banking code calculators and code cards, computers, mobile phones and accounting documents.

With regard to the activities implemented by the organised criminal group, the SRS TCPD initiated criminal proceedings in connection with the constituent elements of the criminal offences stipulated by Section 218, Paragraph two and Section 195, Paragraph three of The Criminal Law. Within the framework of these proceedings, one person was recognised as a suspect, to whom a security measure “arrest” was applied. This person had been previously convicted in the criminal proceedings initiated by the State Police:

  • in 2014 according to Section 177, Paragraph three of The Criminal Law, suspended sentence with a probation period of 4 years;
  • in 2015 according to Section 314, Paragraph one, Section 265, Paragraph one and Section 20, Paragraph four of The Criminal Law, suspended sentence with a probation period of 5 years.

For the purposes of the investigation, currently no further information is provided.

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