The National Police have uncovered a scheme to evade nearly 40 million hryvnias in taxes within a second-hand clothing chain
The National Police have uncovered tax evasion schemes within a chain of second-hand shops and related businesses. According to preliminary figures, the losses to the state budget amount to almost 40 million hryvnias.
According to the investigation, the group’s members organised a scheme to artificially ‘fragment’ the business. To this end, each shop was registered in the name of individual entrepreneurs under their control, who were in fact controlled by the organiser.
This involves over 200 shops across the country and more than 500 sole traders who, according to law enforcement, received between 2,000 and 3,000 hryvnias per month for providing their documents for business registration.
The National Police reported that the organiser of the scheme is an entrepreneur with interregional connections who actually resides in the People’s Republic of China and controls the company’s activities. The co-organiser, according to the investigation, is in Austria.
According to the investigation, the scheme involved the network’s executive director, an IT specialist, accountants and regional representatives.
Law enforcement officials claim that the actual management of the shops, control of goods turnover and financial flows was carried out by the group’s organisers, although formally the retail outlets were registered to individual sole traders.
According to the investigation, regional managers transferred funds from the shops to the responsible individuals via ‘grey’ currency exchange points.
According to the National Police, specially developed software played a key role in the scheme. It allowed shop staff to selectively record purchases on the till depending on customer behaviour. The information was stored on servers abroad.
The police claim that this allowed the actual sales volumes to be concealed and tax liabilities to be minimised.
According to preliminary estimates, losses amounting to nearly 40 million hryvnias relate to just a few dozen sole traders under investigation.
Operatives from the Strategic Investigations Department in the Khmelnytskyi region, together with detectives from the Economic Security Bureau, carried out 23 searches in the Khmelnytskyi, Rivne, Volyn, Vinnytsia and Kyiv regions.
The searches took place at the locations where business activities were conducted, as well as at the residences of the suspects and possible accomplices. Law enforcement officers seized computer equipment, mobile phones, accounting documents and other material evidence.
The case was documented by officers from the Strategic Investigations Department in the Khmelnytskyi region of the National Police’s Strategic Investigations Directorate, in conjunction with detectives from the Economic Security Bureau, under the procedural supervision of the Office of the Prosecutor General.
The pre-trial investigation is ongoing.
