EL.AS is in the hands of scammers who saved 70 million on tax evasion

The tax police stopped the activities of a large criminal organization, which, by creating non-existent transaction companies and using false documents, organized fraud within and outside the country under the pretext of VAT and obtaining refundable advances.

During a police operation last Monday, 11 people were arrested, 10 of whom were members of a criminal organization, including three leaders. A criminal case has been opened against them for organizing a criminal community, forgery, fraud, deception of the Greek state and the financial interests of the European Union, money laundering from criminal activities and violation of laws on weapons, drugs and the National Customs Code, while at the same time 23 other people are involved in the case .

Method of action

According to ELASduring a multi-month investigation it became clear that the accused created and joined a criminal organization with a long-term and specific structure and organization, with the aim of concealing non-refund of VAT or illegally establishing rights to VAT refund, collecting illegal financial benefits and concealing illegal financial assistance from funds of the Greek state and European Union, through non-existent companies selling technological products, or legal entities that have the characteristics of “disappeared”.

To achieve their illegal goal, members of the organization:

• used forged documents and false declarations to create companies, and also submitted false rental declarations to the Independent State Tax Office,
• declared the headquarters of the companies as premises in which they were never established and did not conduct any commercial activities,
• used “straw people” or details of individuals unrelated to legal entities as managers/representatives of companies,
• through these details they assigned VAT numbers and received taxisnet codes,
• registered these data in the Main Commercial Register,
• declared supposedly rented premises of companies on electronic platforms, submitted tax returns and submitted appropriate applications for assistance with relevant advance payments;
• opened corporate bank accounts and bank cards linked to them, and also issued electronic bank codes.

However, in order to avoid detection of their activities by law enforcement authorities, they ensured the creation of new legal entities, constantly installed new participants as administrators and covered up fictitious business transactions using a web of banking transactions, coupled with discrepancies between periodic VAT returns in relation to bank loans and debits to accounts.

As a result, tax authorities made decisions as “illegal payments” in relation to non-existent persons or “straw people”, depriving them of the possibility of collection and avoiding criminal and administrative sanctions against members of the organization.

A typical case, according to the report, is the creation of five companies by misappropriation of personal data and the transfer to them of 26 companies that were secretly controlled by members of the organization. This person is included in the updated list of large debtors to the state in the amount of about 3,250,000 euros.

In particular, with regard to VAT fraud, companies managed by members of the organization issued fictitious invoices in the amount of €16,000,426.39 and received fictitious invoices in the amount of €13,545,119.26 for domestic transactions and intra-community supplies, at the same time, they made the corresponding bank payments for fictitious payment of the value of fictitious invoices and filed false VAT returns. Thanks to this procedure, group members collected a total of 5,426,106 euros in VAT refunds for fictitious supplies of goods when they imported from member countries EU products worth 70 million euros, having managed to appropriate the due VAT in the amount of 13,548,387 euros.

Regarding the advance payment fraud, by using tricks and taking advantage of the companies’ infrastructure, their experience and constant monitoring of accounting procedures, they became the illegal recipients of this financial assistance through false, inaccurate or incomplete VAT and gross turnover declarations.

In this way, the organization made 69 companies illegal beneficiaries, receiving a total of 9,695,525.34 euros, and through 13 other companies they tried to collect another 3,582,066 euros.

To legalize their income, they organized a labyrinthine interbank channel consisting of 131 bank accounts. Through them, through 52,539 banking transactions, they transferred the amounts received from 133 returned advances and 44 VAT refunds to the accounts of companies established in EU member states engaged in the trade of technological equipment. They also purchased luxury cars and technological goods.

Indeed, the level of preparedness and high qualifications of this criminal organization is evidenced by the fact that its members created 30 virtual enterprises in September and October 2023 alone to join the subsidized program of the European Union.

What was discovered

During personal searches and searches carried out in homes and businesses, the following were found and seized: 54,186 euros, 2 pistols, 2 shotguns, numerous cartridges and magazines, 6 knives, an iron fist, 8 luxury cars, 59,989 illegal pharmaceutical tablets, 171 electronic cigarettes and many mobile phones. In addition, during the investigation, 1,556,333.82 euros were seized from the bank accounts of 22 companies.

Those arrested were taken to the European Prosecutor’s Office in Greece.

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