SRS fines Riga traffic 14 million euros for fictitious transactions / Day

The SRS believes that Rīgas satiksme and its business partners have participated in tax concealment schemes that have caused significant losses to the state budget.

Two criminal proceedings have also been initiated – initiated by the SRS Financial and Customs Police and the Corruption Prevention and Prevention Bureau (KNAB).

The decision on the surcharge “Rīgas satiksme” has been appealed to the General Director of the SRS.

“Nekā personīga” reports that “Rīgas karte”, which belongs to “Rīgas satiksme” and the French investor “Conduent Business Solutions”, involved two companies in its business, which in the opinion of the SRS were buffer companies.

Both of these companies – SIA “BMS tehnologija” and SIA “Burlat” – were controlled by Andrejs Blažko, an entrepreneur associated with Aleksandrs Brandavas (GKR), who was close to the then Riga City Council. In the opinion of the SRS, these companies deliberately participated in the fictitious transaction scheme or the so-called value added tax (VAT) carousel.

“Rīgas karte” has issued the same invoices to the parent company every month for the services it allegedly transferred to the subcontractors “BMS tehnologija” and “Burlat”, but they executed transactions with other subcontractors, which were soon excluded from the VAT register.

“BMS tehnologija” and SIA “Burlat” and their subcontractors were located at the same address at Raunas Street 5, Riga. The member of the board was basically Blažko everywhere, and the accounting for all companies was done by the same people, the program reports.

The SRS considers that “BMS technology” and “Burlat” did not have the material and technical resources to maintain the e-ticket system. In just two years, Burlat’s transactions with the Riga Card have exceeded 17 million euros, although the company had five employees, none of whom were IT specialists. The French company, which designed, developed and installed a ticketing system for public transport, has also indicated that it has heard about Burlat and BMS Technology for the first time and has never trained the employees of these companies.

Neither Blažko nor Brandavs, a former member of the board of “Rīgas kartes”, has commented on the conclusions of the SRS audit for the program.

Violations have also been established in the purchase of tickets, for which “Rīgas karte” has overpaid five times.

“Nothing personal” reports that the audit has shown that Hong Kong-based T-Ursim Limited has purchased yellow paper smart tickets from the Finnish company Confidex and the French company Paragon Identification SAS for 10 cents each. They were then sold to the Russian company Unimax at a price five times more expensive – 50 cents. And then through three chains of Latvian companies (“BMS tehnologija”, “Burlat”, “Rīgas karte”) the tickets reached the final recipient “Rīgas satiksme”.

The Russian company has paid nine million euros for tickets to a Hong Kong company through a credit institution in Lithuania, where the accountant of the intermediary company “BMS tehnologija” was entitled to handle the account. The Hong Kong company used a bank in Liechtenstein. At the beginning of the SRS inspection, the account of the Russian company in Lithuania was closed, but the recipient of the money in Hong Kong, who is related to another Blazko company, died.

The audit concluded that “Rīgas satiksme”, which was headed by Leon Benhem at the time, could not have been unaware of the scheme and that the members of the board had an agreement on the organization of cash flow between the companies.

An identical surcharge has been applied to “Rīgas Karte” as to “Rīgas satiksme” and the company’s accounts were seized in August this year.

The audit also revealed violations regarding the contractual relations of “Rīgas satiksme” with the company “Alkom-Trans”, which was owned by the then deceased Aleksandrs Krajčeks, reports “Nekā personīga”.

Although Rīgas satiksme has more than 4,000 locksmiths, electricians and other specialists, a contract has been signed with Alkom-Trans for the repair of new trams and trolleybuses and the supply of spare parts. The audit questioned whether the company actually carried out warranties and extraordinary repairs to the new vehicles, as the works took place in the premises of “Rīgas satiksme”.

Checking the bills and contacting the manufacturers, the SRS has found that several spare parts, such as the tachograph, door control unit, tractor engine, have been sold to Alkom-Trans by a 20% -50% mark-up.

According to Nothing Personal, the Unimog U423 special vehicle for tram maintenance is noteworthy. Alkom-Trans bought it from the German company Zwiegoff for 493,816 euros, resold it to the Czech company Škoda with a mark-up of 70,000 euros for 556,300 euros, and Rīgas satiksme bought it from a Czech company a month later. another 160,000 euros more expensive than 724,882 euros. The program emphasizes that the municipal company has paid the same for the tram vehicle as the Ministry of Defense for the new armored personnel carrier. In total, the value of the rail vehicle in this supply chain increased by € 231,066.

The SRS considers that the transactions of “Rīgas satiksme” with “Alkom-Trans” as an intermediary have been fictitious. The auditors are also convinced that Rīgas satiksme was aware of its participation in tax fraud schemes.

“Nothing personal” indicates that in the opinion of the SRS, the mediator was probably not chosen at random, because Krjačeks was a member of the party “Honor to Serve Riga” represented at the time under the leadership of the City Council.

The transactions with Alkom-Trans described in the SRS audit have also been included in the criminal proceedings investigated by KNAB for corruption in tram and trolleybus procurement.

Andrejs Lisenko, the head of the 2nd department of the 2nd Department of the KNAB, indicated to the program that co-operation with foreign countries is taking place in the case. Various foreign banks are required to provide information on financial flows in various accounts in order to find the final recipient of the funds and find out whether they are returning to Latvia to any of the officials.

KNAB has already received some information from Cyprus, Poland and the United Kingdom, but information is still awaited from the jurisdictions to which the money has been transferred, China and Hong Kong.

“Nekā personīga” emphasizes that the tax schemes mostly feature members of “Honor to Serve Riga” or people related to the former Deputy Mayor of Riga Andris Amerika (GKR). The representative of the shareholder during the violations and possible crimes committed by “Rīgas satiksme” was the then Mayor of Riga Nils Ušakovs (S).

LETA has already reported that the SRS arrested the accounts of “Rīgas kartes” this summer. Representatives of the SRS told LETA at that time that during the VAT and corporate income tax audit in one of the Riga companies, the service had identified violations in transactions with more than 10 companies and accordingly calculated the payment to the state budget in the amount of 9.3 million euros.

As a result of the audit, the SRS has made a decision on the application of enforcement measures to ensure the execution of the audit decision. VAT and corporate income tax audit was performed for the period from 2016 to 2018.

Source: by

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