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Monday 23.07.2018 | Name days: Magda, Magone, Mērija
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SRS considers closing Gai Bei for good, as fraudulent activities continue

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBecause fraudulent activities with cash register systems continue at Gan Bei restaurants, State Revenue Service may decide on closing some of the company’s branches or putting an end to all of Gan Bei’s activities for good, notes SRS Director Inara Petersone.

Deputy Director of SRS Karspars Cerneckis notes that even though authorities had uncovered criminal activities at Gan Bei, other companies continue carrying out similar illegal tax manipulations. Nine inspections have been performed at different companies in January. All inspections have yielded violations of different kind.

«Those are popular restaurants, hotels, pool clubs and other entertainment venues in Old Riga. Considering the scandalous case with Gan Bei, these companies have started to cover their tracks more carefully: changed cash registers, often use the excuse of losing receipts and other reasons. Nonetheless, illegal manipulations with cash registers continue,» – says Cerneckis.

Last year, having published illegal activities committed by Gan Bei management, SRS hoped other companies would stop their illegal activities. Unfortunately, this year’s inspections have revealed that companies working in catering and service provision areas continue to perform illegal manipulations. The only difference is that they are more careful in hiding them, said Cerneckis.

When asked why SRS does not reveal the names of companies engaged in fraudulent activities, Petersone said SRS would gladly do it and that society would only benefit from knowing their names. «Unfortunately, the current legislation does not allow law enforcement institutions to reveal any names during the administrative process,» – said Petersone.

She noted that it is not SRS’ goal to close companies. However, because Gan Bei clearly continues its fraudulent activities, it is clear SRS will have to apply stricter penalties.

Petersone notes that SRS has yet to collect enough evidence in order to close the company through an administrative process. However, until enough evidence has been collected, this possibility remains open.

«Something has broken in our society. We’ve taken a turn in the wrong direction. We have never seen such open and confident disregard of tax regulations. It seems something is wrong with people’s abilities to reason,» – said Petersone.

BNN had previously reported that a criminal group with ties to owners of Gan Bei network of restaurants had been stealing approximately EUR 700,000 to EUR 800,000 from cash registers, which is equal to 50% of monthly revenue, on a regular basis.

On December 10th, Latvian Finance Police arrested seven members of this criminal group, including the wife of Saeima deputy Sergei Potapkin. According to authorities, she is one of the leaders of the criminal group.

During a press-conference this on December 11th, Deputy Director of State Revenue Service for combating organized crime Kaspars Cerneckis neither confirmed nor denied the possibility of searches having been performed in the office of the owner of Gan Bei restaurant – Lage Ko. He did confirm, however, that among the arrested persons is also Saeima deputy Sergei Potapkin’s wife Galina Karmaca, who is the co-owner of Lage Ko.

Director of SRS Finance Police Kaspars Podins reports that authorities have performed a total of 30 searches. Seven persons have been arrested: five of these people form the core of this criminal group. Podins adds that Potapkin’s wife is apparently one of the heads of this criminal group. Two of the arrested persons remain in custody.

The estimated damage done to the state as a result of the aforementioned criminal activity is EUR 780,000 of unpaid VAT. Additional calculations will be performed. With that, this amount may grow even more, because allegedly the company did not pay any social taxes for its employees in addition to not paying VAT, notes Prosecutor General Eriks Kalnmeiers.

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