Fraud Case Revealed: Damage Restored

A citizen, representing a Russian passport, acquired various types of goods worth a total of AMD 66,323,000 from several companies considered residents of Armenia, including VAT of AMD 12,280,000, such as watches and gold jewelry. The damage caused through fraudulent activities has been restored. This was reported today, October 25, by the press office of the Prosecutor General's Office.

On March 11, 2019, a criminal case was initiated in the Investigation and Operational-Investigative Department of the State Revenue Committee of Armenia under the first part of the third paragraph of Article 178 of the RA Criminal Code concerning A.G., who allegedly stole a particularly large amount of AMD 3,300,000 through deceit and caused the same amount of damage to the state.

Specifically, according to the invoices for VAT refund under the 'Tax Free' system, A.G. acquired various goods worth AMD 66,323,000, including VAT of AMD 12,280,000, from several companies considered residents of Armenia in 2017-2018, presenting a Russian passport. A.G. then submitted the relevant documents to the customs body, based on which he received compensation for the VAT amounts included in the prices of the goods purchased for export, paid in Armenia, according to Decision No. 751-N of the Armenian government dated June 29, 2017.

The government’s aforementioned decision was adopted to encourage the promotion of exports, stipulating that VAT amounts paid in Armenia are reimbursed for goods purchased under certain conditions by a foreign individual, including citizens of other countries when exporting those goods.

However, a letter from the Passport and Visa Department of the RA Police revealed that A.G. is not only a citizen of Russia but also a citizen of Armenia. According to the Law on Citizenship of Armenia, a dual citizen is recognized solely as an Armenian citizen for the purposes of the RA, thus A.G. had no right to benefit from the VAT refund under the 'Tax Free' system.

At the same time, it was also established that A.G. consistently presented the Russian citizen’s passport while making these purchases in Armenia, and the employees of the companies from which he made the purchases were reportedly unaware of his Armenian citizenship and issued VAT refund invoices.

During the preliminary investigation, it was revealed through the examination of VAT refund invoices, the statement from Converse Bank CJSC, and the withdrawal orders from Ardshinbank CJSC that A.G. received cash amounting to AMD 9,171,724 and non-cash transactions amounting to AMD 3,108,699 during 2017-2018.

On August 2, 2019, the division for investigating crimes committed in the territory of the 'Zvartnots' International Airport of the RA Investigative Committee, where the mentioned case was transferred, made a decision to discontinue criminal prosecution and halt the proceedings based on the absence of criminal activity in A.G.'s actions.

However, the prosecutor overseeing the legality of the preliminary investigation, upon reviewing the materials of the criminal case and verifying the legality of the investigator's decision, concluded that it was necessary to carry out several investigative and procedural actions to provide final legal assessments to A.G.'s and other persons’ actions, determine the likelihood of other criminal manifestations, and ensure completeness and multifacetedness in the investigation. Based on this, the prosecutor annulled the decision to refrain from prosecution and to discontinue the proceedings in the criminal case.

During the subsequent preliminary investigation, A.G. was charged under the first part of the third paragraph of Article 178 of the RA Criminal Code by the prosecuting authority. As a result of the efforts of the Yerevan Prosecutor's Office, A.G. nearly fully restored the damage caused to the state by transferring AMD 12,280,000 to the deposit account of the RA Prosecutor’s Office on October 23, 2019. The preliminary investigation is ongoing.