VIDEO. State Revenue Committee Uncovers VAT Fraud Scheme to Embezzle State Budget Funds

The Investigative and Operational Intelligence Department of the State Revenue Committee of Armenia received operational data indicating that a company had obtained state registration without any genuine intention to engage in entrepreneurial activities. Its goal was to artificially create value-added tax (VAT) amounts to embezzle from the state budget.

The officers of the Investigative and Operational Intelligence Department, along with the Eastern Customs Administration, developed and implemented complex operational and investigative measures to verify the authenticity of the received data.

It has been established that in July 2023, the company ‘EXPORT GROUP 1’ LLC, having received state registration, artificially created conditions to disguise its criminal intent and informed the tax authorities that it was allegedly engaged in the production of anti-corrosive agents at its factory address in the city of Artik, Shirak Province.

It was also revealed that in order to complete its criminal intent, the so-called anti-corrosive products had been exported by the company to the Russian Federation on two occasions.

However, according to operational data, the exported product was not an anti-corrosive substance, and such production was not actually organized by the company. The export process aimed to embezzle the VAT reflected in the tax invoices for the purchased 1,171,085 liters of automotive fuel.

During the export of the alleged anti-corrosive products, sampling was carried out by the staff of the Eastern Customs Administration. An examination was appointed, which confirmed the previously received operational information that the exported product was not an anti-corrosive agent but rather used engine oil.

As a result of the investigation, it was found that the necessary equipment for organizing the production of anti-corrosive agents was not present at the mentioned address.

Given the irrefutable factual data and circumstances obtained during the measures, the director of ‘EXPORT GROUP 1’ LLC, K.K., confessed at the Investigative and Operational Intelligence Department that they had not actually engaged in the production and export of anti-corrosive agents and committed to restore the damages caused to the state.

As a result of the operational-intelligence measures, K.K., the director of the company, was arrested on suspicion of embezzling 75 million AMD in VAT from the state budget. At the same time, information regarding the apparent criminal act was submitted to the Investigative Committee of Armenia.

A criminal case has been initiated, resulting in the full recovery of the damages caused to the state. Operational and investigative measures and the pre-investigation of the criminal case are ongoing, with necessary investigative actions and operational-intelligence measures being undertaken to clarify all circumstances of the case, the entire scope of individuals involved in the criminal group, as well as the authenticity of the documents accompanying the company’s fuel acquisitions.