The Security Service of Ukraine and the National Anti-Corruption Bureau have exposed a large tax evasion centre 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, the person who held senior positions in the State Tax Service of Ukraine at the time of the transactions, including being the acting head of the service in 2021, facilitated the unhindered operation of the conversion centre. At the same time, the former deputy head of the Main Directorate of the State Tax Service in Poltava region, who headed the commission on the suspension of tax invoice registration, ensured that decisions were made for the benefit of the ‘right’ companies.

These individuals acted in the interests of a criminal organisation. Between 2020 and 2023, the conversion centre issued tax invoices with false information about the supply of goods and services for a total amount of UAH 15 billion, and the fictitious value-added tax amounted to over UAH 2.3 billion (about USD 55 mln).

The scheme included members of the criminal organisation creating a conversion centre and involving over 200 controlled companies in tax payment fraud.

The illicit mechanism consisted of:

• the controlled companies drawing up false tax invoices for business relations with real enterprises;
• registering the invoices in the Unified Register of Tax Invoices;
• real enterprises using the invoices to reduce their tax liabilities.

Based on the SSU and NABU’s investigation, 11 participants in the scheme have been notified of suspicion under the Articles of the CCU:

• 255.1, 255.2 (creation, leadership of a criminal community or criminal organisation, participation in it);
• 212.3 (tax evasion);
• 364.2 (abuse of power or official position);
• 368.4 (acceptance of a proposal, promise, or receipt of an unlawful benefit by an official);
• 369.3 (proposal, promise, or provision of an unlawful benefit to an official).

The head of the conversion centre has been detained while attempting to leave Ukraine.

The pre-trial investigation is ongoing and is carried out under the procedural supervision of the Specialised Anti-Corruption Prosecutor’s Office.