SBU and NABU uncover currency conversion center operating with assistance of former head of State Tax Service

The Security Service of Ukraine (SBU) and the National Anti-Corruption Bureau (NABU) have uncovered a powerful currency conversion center that operated with the participation of the former head of the State Tax Service and the former deputy head of the Main Directorate of the State Tax Service in Poltava region.

"As the investigation established, an individual who held senior positions in the State Tax Service of Ukraine at the time of the transactions, specifically the acting head of the agency in 2021, facilitated the unimpeded operation of the conversion center. Furthermore, the former deputy head of the Main Directorate of the State Tax Service in Poltava region, who headed the commission on issues of suspending the registration of tax invoices, ensured that decisions were made in favor of the ‘right’ companies," the SBU press service reported on its Telegram channel.

According to the case materials, these defendants acted in the interests of a criminal organization. Between 2020 and 2023, the conversion center generated tax invoices containing false information about the supply of goods and services totaling UAH 15 billion, and the fictitious value-added tax amounted to over UAH 2.3 billion.

According to investigators, the "scheme" consisted of members of a criminal organization creating a conversion center and recruiting more than 200 controlled companies to conduct tax fraud.

The mechanism of the crime consisted of controlled companies preparing false tax invoices regarding business relations with real enterprises, registering the invoices in the Unified Register of Tax Invoices, and the use of the invoices by real enterprises to reduce their tax liabilities.

Currently, according to the SBU and NABU, 11 participants in the "scheme" have been charged under Part 1 and Part 2 of Article 255 (creation, management, or participation in a criminal community or criminal organization), Part 3 of Article 212 (tax and fee evasion (mandatory payments), Part 2 of Article 364 (abuse of power or official position), Part 4 of Article 368 (acceptance of an offer, promise, or receipt of an unlawful benefit by an official), and Part 3 of Article 369 (offer, promise, or provision of an unlawful benefit to an official) of the Criminal Code of Ukraine.

"The head of the conversion center was detained while attempting to leave Ukraine," the SBU noted.