Greek Tax Inspectors Arrest 18 Over €203m Straw Men Ring

by · Greek City Times

Greek tax inspectors arrested 18 people on Friday over a straw men network that allegedly ran up more than €203 million in unpaid taxes and pension contributions.

The Independent Authority for Public Revenue (AADE) said its DEOS financial crime unit found €68 million in unpaid VAT and income tax. In addition, the network owed €135 million in contributions to the EFKA social security fund, AADE said.

Over three years, the straw men network allegedly used more than 4,200 tax registration numbers. Those numbers covered more than 2,000 restaurant, bar and nightlife businesses, according to investigation data.

The ghost companies existed only to build up debts that nobody would ever repay, authorities said.

Read more: Greece Seeks Freeze on Foreign Accounts in €120 Million Fraud 

Sixty AADE auditors and seven prosecutors took part in the operation. It covered more than 700 business addresses in Thessaloniki, Chalkidiki and other parts of Greece.

Those businesses involved 1,300 straw men and 700 hidden owners.

How the straw men were recruited

The network looked for people with serious health problems, according to investigation data. Recruiters worked mainly outside Theagenio Hospital in Thessaloniki and Agios Savvas Hospital in Athens.

In return for small payments, those people agreed to appear on paper as company managers and sole partners. However, they had no real role in running the businesses, AADE said.

A well-known actor and model is among those arrested. He told authorities the network paid him €200 to €700 a month to act as one of its straw men.

After a months-long inquiry, the auditors identified the real operators. AADE described them as well-known nightlife entrepreneurs who own dozens of popular bars and clubs in Thessaloniki and Chalkidiki.

Three accountants and a lawyer allegedly played a central role. They set up the companies and managed the front of straw men.

The lawyer also allegedly used forged authorisations to obtain licences from the municipality, the fire service and health inspectors.

During searches at luxury villas belonging to one businessman, inspectors found weapons, magazines, expensive watches and cash. Some suspects also posted photos of luxury trips to exotic destinations on social media, AADE said.

Charges and court process

Following the arrests, a Thessaloniki prosecutor brought felony charges. They include running, forming and joining a criminal organisation, and money laundering.

The charges also cover forgery and repeated fraud against the Greek state of more than €120,000.

Later, the prosecutor referred the suspects to Thessaloniki’s third special investigating magistrate. Two of the 18 walked free, because their arrests concerned only weapons offences.

A preliminary inquiry into their case continues. Until they give their defence to the magistrate next week, the remaining suspects stay in custody.

Greek City Times reported on 6 November that the European Commission praised Greece’s progress on tax evasion. Earlier, Greek police’s organised crime division said it had dismantled 262 criminal organisations in two years.

Source: Kathimerini

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