Czechs arrest seven more in massive VAT refund scam

In November, elite Czech police unit ÚOKFK and Slovak counterpart arrested 10 people making bogus VAT claims of Kč 360 mln

Society
Brian Kenety | 28.05.2012

The Czech police anti-corruption and financial crime unit (ÚOKFK) have arrested seven more people suspected of attempted tax evasion in an elaborate scam that would have deprived the state of over Kč 500 million in revenue, the daily Lidové noviny and other media reported Monday.

According to the ÚOKFK, those arrested (plus another 10 individuals arrested in November) helped fake the purchase of cards for a prepaid internet webhosting service, Ikropolis.com, which they then pretended to sell to customers in neighboring Slovakia, a fellow European Union member state — and subsequently filed claims for VAT refunds under EU law. If convicted, they could face up to 10 years in prison.

“The intervention of detectives has thwarted the perpetrators’ attempt to recoup funds of at least Kč 508 million to the detriment of the Czech Republic,” ÚOKFK spokesman Jaroslav Ibehej was quoted as saying. ‘[Detectives] thwarted the perpetrators’ attempt to recoup funds of at least Kč 508 million to the detriment of the Czech Republic.’

In late November, the ÚOKFK and its counterpart in Slovakia arrested 10 people allegedly seeking unjustified VAT claims of Kč 360 million. In recent days, the Ostrava branch of the elite Czech police unit caught another seven people who attempted to get Kč 148 million in the same way.

The group had used its own fictitious bank, the Comoros-based Standard Credit Bank, which has a branch in Prague, to conduct the transactions and used special software to simulate the transfer of funds that never took place. “This bank has never existed,” Ibehej said. 

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