Tax fraud schemes on the rise

  • 2009-08-12
  • From wire reports
TALLINN - These difficult times are tempting idle hands for some working in the retail business, reports news agency Invoicing fraud, the practice of creating duplicate and fictitious bills, is picking up in retail sales departments.
The scheme is common in large and well-known retailing companies, and is quite simple. The salesperson writes a duplicate bill, or invoice, and sells it on to an invoice 'factory,' to another company, someone looking to cheat on their taxes. Such a scheme can be used only when the cash register allows for the issuing of duplicate receipts, without making any notation of it as being a duplicate.

CEO of Rautakesko, Alo Ivask, says that his company, which operates the K-Rauta stores, is familiar with the scam.
"The Tax and Customs Board (MTA) sent an enquiry on a duplicate receipt to us. We started to investigate, and it became clear that a former employee had done the work," said Ivask. He added that the former employee, using a familiar excuse, said that "a friend asked," and "I didn't think about it." These false receipts totaled about 20,000 kroons (1,280 euros).
The fraudsters then, through another company, turn in the receipts for tax refunds, or credits, from the state.

An easier trick for the employee to use is to pick up the receipt that the customer leaves behind. "I can't exclude that it hasn't been done, since it's nearly impossible to check what happens to the receipts that customers don't take along or throw away," says Gross store chain owner Oleg Gross.
He added that "you don't have to be a salesperson to make that scheme work. A customer can grab the thrown out receipts as well."
Chief of the audit department at MTA, Egon Veermae, says that management usually hears of such schemes at the MTA, "people are clever. The MTA has caught more than ten companies in the past several months."

"We haven't initiated any separate actions on this. There have just been questions with some receipts when auditing some companies, and we've found companies and the people who have been issuing these receipts," he said.
Usually the companies participating in these scams, the ones 'buying' the services, are caught when their auditors uncover the transactions. Veermae said that a "service provider may have more than one customer."

The fee for buying the service is minimal, about 30 kroons to 50 kroons per a 1,000 kroon invoice. Quite common are cases where a customer asks to write out goods to the receipt, which won't match the purchases. Veermae says that the salesperson often doesn't suspect that there's something illegal going on.