Unconditional prison sentence of 36 months for money laundering of more than 3.2 million euros and use of false invoices

News item | 20-10-2022 | 11:45

Concealed assets abroad

This case stems from the so-called DCC project of the Tax and Customs Administration, which looks at payments in the Netherlands with foreign debit and credit cards. The aim of this project is to trace the existence and extent of Dutch assets concealed abroad, to trace them and to have them flow back into the Dutch treasury. Today’s case has been concluded successfully thanks to the collaboration of the FIOD (Fiscal Intelligence and Investigation Service) and Her Majesty's Revenue & Customs (HMRC) in a Joint Investigation Team (JIT) set up for this purpose. According to the Public Prosecution Service, the first time in the history of the HMRC in the United Kingdom (UK).

Five VISA cards, foreign bank accounts and unexplained spending

This investigation concerned five VISA cards from the suspect and her now deceased husband, two of which were linked to accounts in Switzerland and three to an account in the United Kingdom (UK). At least 338 cash withdrawals were made with the VISA cards within a certain period. The nature of the expenditure showed that the users of the cards fully or largely lived in the Netherlands while, according to the information provided by the Tax and Customs Administration, they lived abroad. The expenditure could not be explained by the income and assets they declared to the tax authorities in the Netherlands and the UK.

In addition to the suspect and her husband, two English legal entities were also identified as suspects. The suspect turned out to be the sole director of one of the legal entities, an English company in Manchester. She also turned out to be the sole shareholder through a Dutch so-called ‘holding company’. This company, originally Dutch, had a Dutch business bank account, from which large amounts were paid to two companies in Liechtenstein.

Collaboration between the Netherlands and the UK

At the end of 2016, a JIT was started with the HMRC in the UK. The HMRC has been investigating possible criminal offences with the suspect’s company in Manchester. In the meantime, the FIOD focused primarily on laundering the money obtained from this, which, according to the Public Prosecution Service, had been deposited in Liechtenstein.

Findings of the investigation and accusations

The investigation revealed that more than 3.2 million euros was transferred from the company in Manchester to two companies in Liechtenstein in the years 2009-2012 using false invoices. Even after 2012, large withdrawals are visible through Dutch and English private accounts held by the suspect and her husband. The company was put under administration in 2015 and went bankrupt in October 2016. The Public Prosecution Service accuses the suspect of draining the Manchester company financially and laundering the proceeds through a web of two Liechtenstein entities and several bank accounts. “She wanted to conceal this with 96 false invoices,” said the prosecutor.

According to the Public Prosecution Service, the suspect also appears to be behind the two Liechtenstein companies. Behind the scenes, according to the prosecutor, they were in control of the appropriated funds. It is not known exactly what happened to the money in Liechtenstein, but the FIOD and HMRC observed credits from accounts from Liechtenstein to the Dutch and English bank accounts. In this way, according to the Public Prosecution Service, a large part of that money ended up with her and her husband through other means.

And according to the public prosecutor, some of that money was spent via VISA cards, partly withdrawn in cash and partly spent on all kinds of private matters such as the purchase of boats, cars, land, a mortgage, maintenance of the house and garden and horses. Because this money was obtained through a crime, the Public Prosecution Service has charged this as money laundering.

Additional tax assessments and fines in the UK

In the UK, the accused has received various additional tax assessments, as well as fines (privately and for the company) from the tax authorities because the accused wrongly deducted the false invoices as business costs. She is not prosecuted for this in the Netherlands. The Public Prosecution Service believes that the money does not come from tax evasion, but from unlawful withdrawals from the company in Manchester. The suspect’s husband died in the course of 2021.   

Sentencing demand

“A total of approximately 3.2 million euros has been appropriated from the company over a period of four years. Through a web of 33 accounts at home and abroad, that money ended up with the suspect in a private capacity and was spent by her and her husband on all kinds of things. She is being prosecuted for using the false invoices to the company and laundering that money,” the prosecutor said. An unconditional prison sentence of 36 months is therefore appropriate, according to the prosecutor.

The court will deliver its judgment on 17 November 2022.