Category: Tax Evasion

Romanian Authorities Investigate HS Timber Employees in Alleged Tax Scheme

Tax Evasion
Romanian authorities are investigating employees of the local subsidiary of Austria’s HS Timber Group for allegedly failing to pay $8 million in taxes on sales of undeclared lumber, according to a prosecution document provided to OCCRP’s member center, Rise. HS Timber Production Romania said it was cooperating with the Directorate for Investigating Organized Crime and Terrorism (DIICOT). “The company has always been fully cooperating with the authorities to ensure comprehensive and transparent fact finding processes,” HS Timber Production Romania said in an emailed response to questions. The company added that it “has always operated in compliance with all applicable national…

Ex-Directors of Abramovich-Linked Firm Indicted in €25M Cyprus Tax Evasion Case

Prosecutions, Tax Evasion
Former directors of a company linked to Roman Abramovich’s superyachts will end up in Cyprus court for criminal offenses related to VAT, officials say. Congo’s Ex-Justice Minister Convicted of Diverting War Victim FundsFormer Justice Minister Constant Mutamba has been convicted of diverting $19 million meant to compensate war crime victims in Kisangani. Druze Families Blame Syrian Forces for Suwayda ExecutionsAmnesty International urges accountability after Druze civilians were executed “in cold blood” in Suwayda, accusing Syrian forces of sectarian crimes that reflect the deadly cost of impunity. Cyprus’ tax commissioner on Friday filed a criminal indictment against former directors of a…

Cyprus Court Reinstates Abramovich-Linked Firm in VAT Probe

Tax Evasion
A Cypriot court this week ordered that a defunct company owned by sanctioned Russian billionaire Roman Abramovich’s offshore trust be reinstated so it can pay the 14 million euros in VAT it failed to pay before it was closed.. Blue Ocean Yacht Management Limited, BOYM, which operated for more than two decades before its dissolution last July, was ultimately owned by a Cyprus trust that benefited Abramovich. For more than a decade before it folded, Blue Ocean contested in court a 2012 order by Cyprus’ tax authority compelling the firm to pay the multimillion-euro tax bill. Details of the unpaid…

Italy Arrests 11 in €520m ‘Moby Dick’ VAT Fraud Case

Fraud, Tax Evasion
Authorities in Italy have arrested 11 people suspected of laundering hundreds of millions of euros from a Europe-wide tax fraud scheme that exploited cross-border trade and relied on mafia-style protection. The suspects, detained in coordinated raids across Milan and Palermo, are accused of operating a criminal network behind what investigators call one of the most complex VAT fraud cases ever uncovered in the European Union. The operation, code-named Moby Dick, centers on a carousel scheme that used shell companies to move electronic goods — such as AirPods and laptops — across borders, issuing fake invoices worth more than €1.3 billion…

Credit Suisse Fined $511M in US Tax Evasion Case

Tax Evasion
Credit Suisse Services AG has agreed to pay nearly $511 million in penalties to settle a U.S. criminal case accusing the Swiss bank of helping wealthy American clients evade taxes by hiding more than $4 billion in offshore accounts for over a decade. The bank pleaded guilty to conspiring to defraud the Internal Revenue Service (IRS) by concealing assets in at least 475 accounts from 2010 to 2021, according to a statement from the U.S. Department of Justice (DOJ) on Monday. The investigation, launched in 2023, found that Credit Suisse facilitated efforts by U.S. clients to hide their ownership and…

With sharp rise in incorporations, Wyoming cements reputation as US secrecy haven

Tax Avoidance, Tax Evasion
Wyoming — the least populated U.S. state — has overtaken Delaware for the most corporate registrations per capita, cementing the Cowboy State’s reputation as a top secrecy destination for the ultrawealthy, according to new data released today. The analysis, compiled by corporate data firm OpenCorporates and shared with the International Consortium of Investigative Journalists, shows that the number of Wyoming incorporations shot up by 30% in 2023, while Delaware’s rate of growth slowed. The spike in new incorporations has raised concerns in Wyoming about a possible influx of bad actors seeking to exploit the state’s laws that allow anonymous limited…

King Charles’ godson had extensive business ties with a US defense contractor now accused of a massive tax evasion scheme, records show

Tax Evasion
Lord Charles Tryon, who is not accused of wrongdoing, held key positions in several firms prosecutors allege were part of the contractor’s efforts to conceal more than $350 million in profits. A godson of King Charles worked closely with an American financier accused by the U.S. government of evading taxes on more than $350 million in military contract profits, according to corporate documents. Lord Charles Tryon held positions at a number of companies tied to Douglas Edelman, a former defense contractor who was charged in May on 30 counts of tax evasion, conspiracy, and providing false information to U.S. authorities.…

FinCEN, IRS warn US banks of $100Ms in tax evasion by construction firms using shell companies, undocumented workers

Fraud, Tax Evasion
FinCEN and the IRS Criminal Investigation unit (CI) today (Tuesday) issued a notice to banks around tax evasion and workers’ compensation insurance fraud in the US residential and commercial real estate construction. Both agencies said hundreds of millions of dollars are lost to these schemes, which are perpetrated by illicit actors primarily through banks and check cashers. The Notice describes how payroll tax evasion and workers’ compensation fraud schemes may involve networks of individuals and the use of shell companies and fraudulent documents. These schemes affect the local and national construction job markets and put legitimate construction contractors and their…

UK Authorities Bust Northern Ireland’s Largest-ever Tax Evaders

Tax Evasion
The United Kingdom’s tax, payments, and customs authority said Wednesday that the ringleaders of a group that prompted Northern Ireland’s largest ever tax probe have been imprisoned, following the discovery of covertly recorded talks in a tapped accountant’s office. “The decade-long investigation into the £5 million (US$6.4 million) tax fraud ended yesterday (13 June 2023) with prison sentences issued to gang leaders 58-year-old Francis Devlin and 56-year-old Paul McStravick for a combined total of eight years [four years each],” HM Revenue and Customs (HMRC) said in a statement.Another 25 accomplices were sentenced to suspended jail terms, as the majority of…

Tax dodging and non-compliance during pandemic cost UK £9bn – NAO

Tax Evasion
Tax dodging and non-compliance during the pandemic cost the government £9bn, Whitehall’s spending watchdog has found. The loss to the public purse came as HM Revenue & Customs (HMRC) moved thousands of tax compliance staff to Covid support schemes, reducing its capacity to investigate people and businesses not paying the right amount, according to the National Audit Office. About 1,350 workers were redeployed to Covid schemes throughout 2020-2021, shrinking the number of those working on tax compliance by 12%, the NAO said. Before the pandemic, tax revenues from HMRC’s compliance work were on average 5.2% of its total revenues. This…

E.U. adds Bahamas and Turks & Caicos to its Tax Haven Blacklist

Tax Evasion
The Council of the European Union has added the Bahamas and Turks & Caicos Islands to its list of “non-cooperative” tax jurisdictions. In its latest publication, the Council of the European Union has also placed Anguilla back on the list, just one year after it was removed. The body says it “underlines the importance of promoting and strengthening tax good governance mechanisms, fair taxation, global tax transparency and fight against tax fraud, evasion and avoidance, both at the EU level and globally.” The Council also says it welcomes the progress of relevant jurisdictions through the “active steps” taken by the…

German Prosecutors search Deutsche Bank HQ in tax probe

Tax Evasion
German prosecutors have searched the headquarters of Deutsche Bank in connection with an ongoing investigation of the multibillion-euro tax fraud scheme known as “cum-ex”, Deutsche Bank said on Tuesday. Germany’s largest lender is one of many banks that prosecutors have raided in connection with the tax scheme that thrived more than a decade ago. The public prosecutor’s office in Cologne, without naming Deutsche Bank, confirmed it had conducted a raid on a bank and an auditing company in Frankfurt that involved more than 100 investigators, and extended to the homes of 10 suspects. Deutsche Bank, under Chief Executive Christian Sewing,…

Gang Smuggled 117m illegal Cigarettes into the U.K.

Tax Evasion
A gang who smuggled more than 117 million illegal cigarettes into the UK and cheated the taxman out of £36million were caught out by the EncroChat hack. The Rochdale-based gang smuggled the illicit cigarettes into the country on a ‘massive scale’, hiding them in lorries. They also sent millions of pounds worth of cash – from selling the cigarettes – out of the UK in the same way to Poland to a mysterious figure referred to as ‘Big Boss’. Hazhar Mohammad-Pani, 31, and Hubert Smolarek, 41, were both jailed for more than seven years. “Although quite short lived, the offending…

NCA Set to Recover an Estimated £1.1 million After Derby Family Failed to Pay Tax For Over a decade

Tax Evasion
The National Crime Agency has secured assets worth an estimated £1.1 million, after an NCA tax investigation into a Derby man revealed that his family run business had avoided paying tax for 18 years, on profits suspected of being linked to drugs and other criminal activity. Tonino (otherwise known as Tony) Persico, 58, of the Sinfin area in Derby, and members of the wider Persico family, operated ice cream vans and rented industrial units on Osmaston Road. A Derbyshire Police investigation looked at the family of Mr Persico after suspicions were raised about links to drugs, fraud and money laundering,…

Pandora Papers: 4 Takeaways From Massive Leak of World Leaders’ Finances

Tax Evasion
A massive leak revealing the secret assets of some of the world’s most powerful figures is putting new pressure on global leaders to crack down on shadowy finances. The so-called Pandora Papers consist of millions of leaked financial documents that were reviewed and analyzed for two years by more than a hundred news outlets, including The Washington Post and the BBC, that are part of the International Consortium of Investigative Journalists (ICIJ). The trove illustrates the secretive practices that world leaders and wealthy individuals have employed to keep their assets hidden in dozens of countries, including the United States. Here…

Pandora Papers: Tax Avoidance Revelations Prompt Outraged Denials

Tax Evasion
International reaction to offshore data leak ranges from pledges to clamp down to anger and cries of old news. The Pandora papers’ revelations prompted an avalanche of international reaction on Monday, ranging from solemn government pledges to clamp down on tax avoidance to outraged denials and a few cries of “old news”. The leak published on Sunday by the Guardian and other global media partners revealed the leading role played by the US in the offshore industry, including in the state of South Dakota. It also showcased the use of offshore secrecy jurisdictions by world leaders past and present, as…

Founders of Crypto ICO Plead Guilty to Tax Evasion After Raising $24m from Investors

Digital Currencies, Prosecutions, Tax Evasion
The owners of a cryptocurrency company have pleaded guilty to tax evasion, announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham. Bitqyck founders Bruce Bise, 60, and Samuel Mendez, 65, were charged with tax evasion in August. Mr. Bise pleaded guilty on Sept. 9; Mr. Mendez pleaded guilty this morning. According to plea papers, Mr. Bise and Mr. Mendez admitted that Bitqyck raised approximately $24 million from more than 13,000 investors. Instead of fulfilling their promises to these investors, the defendants used Bitqyck funds on personal expenses, including casino trips, cars, luxury home furnishings, art, and…

HMRC Investigates 153 ‘Enablers’ of Tax Evasion

Tax Evasion
HM Revenue & Customs has confirmed it is currently investigating 153 suspected ‘enablers of tax evasion’ including unregulated tax advisers. According to law firm RPC, cracking down on ‘enablers of tax evasion’ has been a key area of focus for HMRC since it established its Fraud Investigation Service in 2015. It said HMRC’s fraud investigation service has been given additional resources to recruit more staff and as a result, the number of investigations into tax fraud enablers is likely to increase. A HMRC spokesperson told FTAdviser: “We are increasingly looking to tackle those professionals who help facilitate tax crime, with…

Tax Evasion Most Prevalent Financial Crime in Rwanda

Tax Evasion
Tax evasion is the most prevalent financial crime in Rwanda, in terms of money lost, according to statistics from over the last five years, indicating that over Rwf20bn were lost to the vice during this period. According to a report by the Financial Intelligence Centre (FIC), corruption which involves embezzlement of government funds is the most prevalent financial crime in terms of cases, with 1,076 of them recorded. The Financial Intelligence Centre, which previously operated under the National Bank of Rwanda (BNR) is involved in ensuring compliance of regulation and enforcement of the laws and rules in finance and the…

Africa Must Build Robust Financial Compliance Systems Against Financial Crime – President Akufo-Addo

Corruption, Money Laundering, Tax Evasion
The President of the Republic, Nana Addo Dankwa Akufo-Addo, has stated that for Africa to be able to transform herself, and become the epitome of economic empowerment and self-reliance, she needs to have the wherewithal to be able to protect and optimise the resources at her disposal. To this end, President Akufo-Addo, speaking at the EBII Africa Investments Risk and Compliance (IRC) Summit, on Friday, 30th July 2021, at the University of Oxford, has admonished African governments to build robust financial compliance systems, and ensure strict enforcement of these systems. Speaking on the theme “Financial Crime Compliance and ESG –…

Biden proposes more stringent regulations to catch crypto tax evaders

Digital Currencies, Tax Evasion
Biden’s Fiscal Year 2022 Revenue Proposal aims to catch crypto tax evaders by reinforcing existing information reporting rules and information sharing agreements between jurisdictions. What is Information Reporting? Information reporting is the primary way that regulators like the IRS knows about your crypto activity. Cryptocurrency exchanges are required by law to collect your personal identification information (name, address and social security number) and report your annual activity to the IRS by using forms such as 1099-K, 1099-B and 1099-MISC. If exchanges fail to report this information correctly, they get subject to hefty penalties. Expanded 1099-K Reporting Currently, crypto exchange users…

Former U.S President Trump’s company, longtime CFO Weisselberg charged with tax fraud

Fraud, Tax Evasion
Manhattan District Attorney Cyrus Vance has charged former President Donald Trump’s company, the Trump Organization, and his longtime CFO Allen Weisselberg with tax fraud, according to an indictment unsealed Thursday in New York. The charges are the first brought by New York prosecutors in the case since they launched their investigation nearly two years ago into the financial dealings of Trump, his company, his family, and associates. Weisselberg and the company pleaded not guilty to criminal charges including grand larceny in the second degree as outlined in a lengthy indictment unsealed in Manhattan State Supreme Court. Weisselberg was released on…

South Korean authorities seize $47 Million in cryptocurrency from tax evaders

Digital Currencies, Tax Evasion
Cryptocurrency worth millions of dollars has been seized by South Korean authorities More than 53 billion Korean won ($47 million) in cryptocurrency assets were seized from 12,000 people accused of attempting to hide money from the government In order to comply with upcoming industry regulations, a number of digital asset platforms have begun to delist high-risk coins Thousands of tax evaders have been identified by South Korean authorities as part of a growing crackdown on tax dodging among cryptocurrency investors. The government is said to have seized cryptocurrency worth millions of dollars after a lengthy investigation. It was the largest…

Governance and ownership issues in football and its ties to economic crime

Money Laundering, Tax Evasion
Decades of self-regulation and rapid expansion has led the sport sector to lag behind other industries in corporate governance and policy implementation, as demonstrated by the consistent media exposure documenting scandals at football clubs, and at National and International Sport Federations. On Wednesday April 28th 2021, the Economic Crime Series: Governance and Ownership Issues in Football was held online. The event was organised and chaired by Prof. Lisa Jack who welcomed two speakers, Dr. Rob Wilson and Mrs. Christina Philippou. The Risk & Compliance Platform Europe also took part in this webinar and has subsequently covered it on its website.…

Binance Holdings is under investigation by the Justice Department and Internal Revenue Services

Digital Currencies, Money Laundering, Tax Evasion
[NEW YORK] Binance Holdings is under investigation by the Justice Department and Internal Revenue Service, ensnaring the world’s biggest cryptocurrency exchange in US efforts to root out illicit activity that’s thrived in the red-hot but mostly unregulated market. As part of the inquiry, officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance’s business, according to people with knowledge of the matter who asked not to be named because the probe is confidential. Led by Changpeng Zhao, a charismatic tech executive who relishes promoting tokens on Twitter and in media interviews, Binance has…

The fight against offshore financial crime will be a long campaign

Tax Evasion
On the fifth anniversary of the Panama Papers’ launch, experts say there’s been progress in the fight against dirty money — but much more is needed. In May 2016, weeks after hundreds of journalists released the Panama Papers’ massive exposé of the secret financial dealings and hideaways of politicians, fraudsters and celebrities, a group of world leaders — embarrassed, outraged or knowing a good media opportunity when they saw one — met in London to denounce the global flood of dirty money. British Prime Minister David Cameron, Nigerian President Muhammadu Buhari, Emirati deputy foreign minister Anwar Gargash and others signed…

DAC6, the EU’s New International Tax Reporting Mandate

Tax Evasion
INSIGHT: DAC6 Hallmark Interpretation—More Art Than Science DAC6, the EU’s new international tax reporting mandate, comes with many unknowns for taxpayers and their advisers. Among these unknowns are how different jurisdictions will interpret five categories of hallmarks subject to disclosure. Keith Brockman explains what a hallmark is and why the first two are particularly worrisome. Taxpayers are anxious about the EU’s new international tax transparency initiative: The rules can be subjective and the penalties are significant. As taxpayers have started to read the principles enumerated in the new reporting requirements, known as DAC6, they’re discovering that interpretation may be more…

Over US$427 billion is lost to tax havens every year

Tax Evasion
As governments around the globe face budgetary pressures due to the COVID-19 public health crisis, the urgency to crack down on tax havens – responsible for an estimated loss of over US$ 427 billion each year – has become even more crucial, experts said in response to new findings. A new annual report, published on Friday by the Tax Justice Network, reveals how much each country loses each year, totalling $245 billion directly lost through tax abuse by multinational corporations, and a remaining $182 billion from wealthy individuals that hide their money from local authorities through the use of secretive…