Latvian authorities request criminal prosecution to be carried out in regards to nine people in the Gan Bei criminal case, as confirmed by State Revenue Service’s deputy Director General Kaspars Cerneckis.
Police discovered during the pre-court investigation that the aforementioned company had used special computer software to manipulate cash register systems and artificially reduce revenue registered by the devices. In addition, evidence has been found of the criminal group’s activities in forging accounting documents.
Losses of the Latvian state budget in the form of unpaid VAT and PIT are estimated at EUR 957,799.96.
Gan Bei began paying back the damage it has done to the state budget this year. Approximately EUR 200,000 has been paid to the state budget so far.
Authorities request criminal prosecution of seven people tied to Gan Bei. Five of those people are company employees – accountants, IT specialists and collectors. One of them is the company’s financial director and one other – a board member. Two other people against whom Latvian authorities want prosecuted are tied to the company that supplied illegal cash register software to Gan Bei. Cerneckis refused to give precise details in regards to names of any of those people.
Cerneckis also did not mention any specific companies involved in the criminal case. At the same time, he said theories mentioned by the media – Gan Bei owner Lage Ko and cash register maintenance company Brio – were correct.
The Gan Bei criminal case has been submitted to the prosecutor’s office for launch of criminal prosecution in accordance with Part Three of Section 217 of the Criminal Law and Part Three of Section 2018 of the same law.
Cerneckis has said the maximum penalty for crimes committed by Gan Bei is a prison sentence of up to 10 years. However, he added that in most cases courts of justice limit the penalty to a fine.
On 10 December, 2014, Latvian Finance Police detained seven members of the criminal group, including the financial director of Lage Ko and Galina Karmaca, wife of Saeima deputy Sergei Potapkin. Karmaca is believed to be the organizer of the criminal group. Following a request by the prosecutor’s office, the Saeima allowed the police to carry out a search in the home of Potapkin and Karmaca.
More than 200 people were interrogated during the investigation and more than 150 data storage devices were inspected.
According to information from Firmas.lv, SRS Finance Police has applied arrests on 33.33% of shares in Lage Ko held by the company’s co-owner Oleg Arups. In addition, Finance Police have applied arrests on Arups’ owned 30% of shares in Lage Ltd and 5% of shares in Lage Ko owned by Karmaca.
Cerneckis adds that over the course of the investigation, which spanned 2015, Gan Bei owner Lage Ko managed to increase employee wages by nearly half. In addition, the company’s turnover and state budget tax payment amount was also increased. Hopefully this means the company has stopped using illegal schemes.
Cerneckis added that the investigation of this case also helped uncover similar violations in other companies. SRS Finance Police is currently working on three more cases involving manipulation of cash register data. These cases are planned to be submitted to the prosecutor’s office next year.