Tax scam worth 325,000 euros shut down in Latvia

On November 8 the State Revenue (VID) Tax and Customs Police Department began criminal proceedings against a criminal group for tax avoidance and money laundering, which created losses of more than 325 000 euros for the national budget, VID announced on December 13. 

The court ordered the arrest of one of the detained persons, but they were freed after paying a 14 000 euro bail bond. VID specialists have determined that the tax avoidance scheme used the forestry and logging industries from January 2018 to August 2019, violating accounting and statistical information requirements, as well as engaging in money laundering.

The criminal activity occurred in Rīga, Kuldīga, the Kuldīga region and Ventspils. 19 searches were carried out at the homes, offices and cars of those involved in the criminal process seizing important evidence, such as code calculators, computers, mobile phones, stamps and accounting documents.

Four persons were detained under suspicion of being involved in the criminal activity. In the interest of the investigation no further information will currently be shared.

As previously reported, on November 21 Saeima adopted amendments to the Criminal Law in the final reading, which would allow for more effective investigation of financial and economic crimes, according to information from the parliamentary Press Service.

The amendments stipulate that persons involved in criminal proceedings with have stricter regulations for justifying the legal origin of acquired holdings. If evidence is presented during the process that the holdings have been illegally acquired and the person being investigated is unable to prove the origin, then they will be considered proven illegal. The bill was drafted by the Judicial Policy Subcommittee of the Legal Affairs Committee.

Also reported, Latvia submitted a progress report to the Financial Action Task Force (FATF) on its efforts to crack down on money laundering, and related financial crimes, the Financial Intelligence Unit of Latvia (FIU) said on November 20.

The report centers on the implementation of recommendations made by Moneyval experts to improve the existing system of anti-money laundering measures and the combating of terrorism and proliferation financing (AML/CTF/CPF).

The report demonstrates the work done by the Latvian responsible institutions since the end of 2017, when the visit of experts from Moneyval to Latvia was concluded and is a crucial part of Latvia's efforts to avoid further punishment for offenses committed iearlier n its banking sector - and particularly to avoid being placed on any international lists of known money-laundering countries, which could have a drastic effect on the economy as well as Latvia's reputation.

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