Latvian firms abet fraudulent scheme

  • 2006-06-07
  • From wire reports
VILNIUS - The Kaunas office of the Financial Crime Investigation Service is investigating a large case of fraud and embezzlement of value-added tax, in which a Latvian citizen is suspected of earning some 3 million litas (870,000 euros) from criminal activities. According to official information, the heads of over 20 Kaunas and Vilnius companies were involved in a criminal group. The Financial Crime Investigation Service and Kaunas City District Prosecutor's Office are conducting an investigation based on five articles of the Criminal Code.

Suspicions in the pretrial investigation have been brought against 18 people, five of whom were arrested, while 14 were hit with other penal measures, including a written pledge not to leave Lithuania, an obligation to register with a police institution and seizure of documents.
The Financial Crime Investigation Service reported that a criminal group, organized by a Latvian citizen V. B., operated from May 2005 to May of this year. The citizen, a male, purchased shares in the companies Oranzine Linija (Orange Line) and RG Service, appointed Latvian citizens as directors of these companies, and involved natural persons and heads of over 20 Vilnius and Kaunas companies in criminal activities.

Using VAT invoices of the above companies, the organized group embezzled about half a million litas of VAT and some 2.5 million litas of company funds.
During the investigation, officers carried out some 40 searches at various Vilnius and Kaunas companies, apartments of members of the organized group. Documents proving criminal deeds, computer equipment and magnetic mediums were discovered during the searches. Over 200,000 litas suspected to have been received by criminal means were found and seized.
Persons and companies had their proprietary rights to 2 million litas worth of property restricted.
The Financial Crime Investigation Service has said that there may be more suspects. The companies involved in the criminal activities are already making restitution for damage done to the state.