Prosecutors reach plea agreement with defendants in international VAT fraud case

RIGA - Prosecutors have reached a plea agreement with three defendants in a criminal case on an international value-added tax (VAT) fraud scheme, and the agreement has been supported by the Economic Affairs Court; as a result, the defendants have received prison sentences, probation supervision and heavy fines, and they will also have to pay EUR 2.68 million compensation, LETA has learned from the court.

LETA has information that the defendants in the case are Deivids Cervinskis-Buss, Sandris Spurkis and Valdis Spurkis.

One of them has been sentenced to one year in prison, banned for three years from engaging in any kind of business activity, three years' probation supervision, a fine of slightly more than EUR 1 million, and partial confiscation of property, including watches, cash and cryptocurrency.

The other person was sentenced to four-year probation supervision, banned from engaging in any kind of business activities for three years and a fine of EUR 100,640.

The third defendant was given three years' probation supervision, banned from engaging in any kind of business activities for two years, and a fine of EUR 50,320.

The defendants have partly compensated other countries' tax administrations for the damage they had caused - slightly more than EUR 1 million, and are yet to compensate another EUR 2.68 million.

The ruling can be appealed to Riga Regional Court.

The criminal case against the three Latvians has been separated from the Admiral 2.0 investigation, in which three persons have been charged with tax evasion, causing damage to the state budgets of Austria, France, Germany, Italy and Spain amounting to EUR 5 million. In addition, one of the defendants in Latvia has also pleaded guilty to laundering more than EUR 1.4 million. One of the defendants has been in custody since November 26, 2024.

According to the European Public Prosecutor's Office (EPPO), these are the first criminal proceedings before a Latvian court in which several European Union member countries are involved as victims. Specifically, the revenue authorities of Austria, Germany and France, acting on behalf of their respective states, have applied for victim status in the proceedings and take part in the court hearing.

As reported, the EPPO in Riga has filed an indictment against Kaspars Kazanovskis, the suspected ringleader of the criminal syndicate targeted by the Admiral 2.0 investigation. The investigation unveiled a large-scale VAT fraud scheme involving the trade of popular electronic goods and creating an estimated VAT loss of EUR 297 million.

The EPPO is the independent public prosecution office of the EU. It is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.