A Massive Crackdown: Alleged Tax Fraud in Construction Industry Uncovered in Several Regions
Illegitimate construction activities uncovered: widespread raids across multiple German states
Twitter ** Reddit ** Discord ** Email ** Print ** Copy Link ** In a significant operation on Tuesday, more than 40 locations were scrutinized in a wide-ranging raid, raising suspicions of evading tax obligations within the construction industry. The joint investigation by the Berlin Public Prosecutor's Office and the Dresden Main Customs Office zeroes in on six individuals aged between 25 and 52, who are accused of skirting social security contributions and taxes amounting to a staggering sum, as reported by the Berlin Public Prosecutor's Office and the Dresden Main Customs Office.
These individuals are alleged to have orchestrated a complex web of corporations, shell companies, and associations as part of a so-called carousel scheme. This illicit scheme involves fraudulent invoicing for non-existent or misrepresented services, creating a deceitful money cycle to dodge taxes and social security contributions.
The workers involved are frequently unregistered for social security or registered with lower salaries, and are often paid off the books. According to the investigation, the suspects have caused a minimum of €3.5 million in damages.
In Berlin, Saxony, Brandenburg, Bremen, and North Rhine-Westphalia, the residences of the suspects, as well as the locations of suspected shell companies and genuine companies potentially implicated in the carousel scheme, were searched. As a result, 45 individuals, discovered to be residing illegally in Germany, were also uncovered during the process.
Seized items included documents, data carriers, mobile phones, a weapon, and ammunition. Additionally, two high-performance vehicles were confiscated under existing arrest warrants. However, no arrests were made, as per the reports.
This scheme, if proven, could potentially lead to damages amounting to nearly Rs 1.2 billion (approximately 1.2 billion in local currency) in overall evaded contributions and taxes, which includes a VAT shortfall of Rs 458 million and nearly Rs 146.5 million in income tax. Furthermore, a 100 percent penalty of Rs 604.6 million has been imposed, totaling a demand for recovery of Rs 1.2 billion along with potential imprisonment under the relevant tax laws.**
(Note: The specific names or identities of the six suspects are not detailed from the search results, and additional details about potential damages caused by other construction companies implicated in the scheme were not provided in the available documents.)
Source: ntv.de, AFP
[Enrichment Data: The large-scale tax evasion raid in the construction industry involved six suspects; however, the specific names or identities of these six suspects are not detailed in the available search results. The total amount of evaded contributions and taxes linked to this case amounts to nearly Rs 1.2 billion (approximately 1.2 billion in local currency), which includes a shortfall of Rs 458 million in value-added tax (VAT) and Rs 146.5 million in income tax. Additionally, a 100 percent penalty of Rs 604.6 million was imposed, bringing the total demand for recovery to Rs 1.2 billion along with imprisonment under the relevant tax laws. This case was filed by the Department of Revenue Investigation (DRI) against a construction company, Dhruba Construction Pvt Ltd, and its director, Dhrubadev. No further details about the other suspects or additional total amounts evaded from other related construction companies were provided in the retrieved documents. The information focuses on this particular major lawsuit within the construction sector.]
- Federal authorities in several countries are now more actively searching for evidence of illegal work in the construction industry, given the massive tax fraud case uncovered in Germany.
- The finance ministry is calling for a general-news and crime-and-justice investigation into the nationwide network of suspected tax evasion in the construction sector, involving allegations of widespread illegal work, skirting social security contributions, and tax evasion, akin to the Italian mafia-style 'gruzzia' that has come to light.
