Dead People Are Used By Criminals To Steal VAT Refund

PRLog (Press Release) - Jun 04, 2007 -
Society Calls For Strong Investigation In Criminal Business Affairs In Latvia

Dead People Are Used By Criminals To Steal VAT Refund


RIga, Latvia, June 04. Public Investigation Bureau of Latvia, a non-profit organization of  journalists, calls for strong investigation in cases of business crimes in Latvia. Since 2003, journalists have found numerous crimes with Enron-style machinations and using dead people for other crimes. We as professionals highly appreciate efforts of politicians to delve into the problem and that is why we hope you will find useful the following facts.

For example, former CEO and members of the board are involved in $35 m stealing from the Latvian Shipping Company (LSC) from 2002 until 2005. Valerijs Godunovs, Alvis Akmens and Aivars Enkuzens, then members of the board, had deals with unknown off-shore companies. Accountants of Ernst&Young have found documents of large deals which has been subscribed by former CEO of LSC Valerijs Godunovs. Those deals with abnormally low time charter rates had decreased revenues of the company by $ 35m, found the investgators.

In april 2007, Godunovs, Akmens, Enkuzens and Olegs Stepanovs have refund this money with an BVI company Rimona Commercial: Latvian company Naftaship, Ltd. had bought real estate for EUR 15m and legalized it for persons mentioned above. The deals are being investigated by Latvian police after journalists published these facts. Latvian Shipping Co is a part-governmental owned shiping company which is one of the largest operators of the middle-class tankers in the world.

In past two years, investigators in Latvia have found several companies which are being run by people who actually are dead and buried, says investigative journalist Imants Liepins. These companies are caught being involved in major VAT refund stealing schemes.

Aleksandrs Denisenko, born 1958 and dead July 5, 2005, more than month after his death became a director of a Latvian company Biting, Ltd. From August 5, 2005, Denisenko have «subscribed» documents for stealing more than 160 thousand euros from Latvian state budget. When this «business» was discovered by police authorities and shut down, the «company» has been participated in almost million euro stealing schemes.

Also, Ints Lauskis, born 1982 in a provincial pauper ghetto in Saldus town (located 100 miles from Latvian capital Riga), commited suicide on August 5, 2005 at age of 23. Two weeks later, on August 18 he became an owner and a director of both Telphin LV, Ltd. and Anabels, Ltd. These companies (as well as Biting, Ltd.) actually are non-existent firms which have been used only for taxes machinations: these companies have no employees, no offices or buildings, no assets, and no any products provided in market. «These companies are just empty shells. For the gangs, it the best if these firms have been registered on the names of the dead persons — there is no more chance for police to catch these persons. Of course, as a matter of fact, the counterfeit documents are made by gang members,» says Imants Liepins, journalist and a founder of Latvian NGO Public Investigation Bureau.

According to Latvian police, there are also cases in which some homeless people has been hired by gangs to run fictitious companies and steal VAT refund. «Every year turnover of these homeless-owned-companies reach in summary more than 30 million euros», says Ainars Bruvelis, director of business and finance data analyst company Lursoft, Ltd.

Tuesday in Luxembourg starts a summit of EU finance ministers for increasing the struggle against VAT machinations. Stealing VAT refund is a never-ending problem for all the EU countries. Every year, billions are stolen from national budgets.


More information on crimes and schemes:
Imants Liepins, investigative journalist,
+371 26 158 188, liepins@mac.com