The fiscal mafia of Ukraine: schemes and "protectors"

Officials in the leadership of the State Fiscal Service continue to hold managerial positions, enrich themselves through illegal schemes, cover schemes for tax evasion and refund of fictitious VAT.

Officials of the SFS, who used their official positions for personal enrichment, still hold their positions:

Oleksandr Khalkovskyi - Director of the Department for Prevention and Detection of Corruption of the SFS;
Ihor Shkurat - Head of the Internal Security Department of the SFS,
Ihor Shepetin - Deputy Head of the Main Department of Internal Security of the SFS;
Stanislav Khudar - Head of the Department of Analytical Work and Database Management of the Department for Combating Money Laundering Obtained Criminally, State Fiscal Service of Ukraine.

The heads of the departments organized an illegal scheme for enrichment, ensuring the existence of this scheme.

The General Prosecutor’s Office of Ukraine is investigating a criminal proceeding (entered into the Unified Register of Pre-trial Investigations on October 17, 2017, under No. 42017100000001297, on the grounds of criminal offenses provided for in Part 1 of Art. 205, Part 3 of Art. 212, Part 2 of Art. 364, Part 5 of Art. 191 of the Criminal Code of Ukraine), in which a number of companies have been identified that were engaged in illegal activities aimed at tax evasion on a particularly large scale. Prosecutors believe that SFS officials covered members of a criminal group involved in illegal money conversion using grain sent for export, as well as creating a fictitious tax credit.

Each of the above-mentioned SFS officials was responsible for their own direction, thereby ensuring the existence of the scheme.

The senior partners of the scheme: Khalkovskyi, Shepetin, Shkurat provided protection at the tops and resolved issues with the SSU, while Khudar directly contacted the executors of the scheme.

In particular, Oleksandr Khalkovskyi was responsible for counteracting corruption in the fiscal service, but in fact, he headed it. Previously, the media linked Khalkovskyi to Vlasov, who won the trust of the former Prime Minister and his man in the tax service - Myroslav Prodan, by "fighting" contraband in the ATO zone. As is known, contraband in the ATO zone went by trucks, but it could not be noticed in the fiscal service during Prodan’s time. Later, Khalkovskyi rose through the ranks to become deputy head of the Odesa customs. There, he worked directly with importers. At that time, entrepreneurs complained about the work of the Odesa customs, with customs clearance of a container taking at least two weeks.

Journalists wrote about large-scale bribes at the Odesa customs, for example, customs clearance of one container could cost 1,500-2,000 dollars. This sum included "interests" for all departments: law enforcement, customs officers, border guards.

At the end of 2018, Khalkovskyi once again received a promotion, this time in Kyiv. A department for the prevention and detection of corruption was specially created for him. Instead of fighting corruption, Khalkovskyi decided to head it.

A panorama of the cottage town where Oleksandr Khalkovskyi’s house is located in the village of Vyshenky near Kyiv

As a result of such activities, the tax official Khalkovskyi acquired a luxury home in the "Ostriv" gardening community in the village of Vyshenky near Kyiv and a plot of land, with a closed entrance to the territory and 24-hour security. According to real estate market experts, the price of such a house starts at 200 thousand dollars. Where a simple tax service official could earn such money for real estate is unknown. One can only guess that it was thanks to his schemes on public service.

Issues with law enforcement were resolved by the leadership of the SFS’s internal security department. The main task of this department is to detect official crimes. However, department head Ihor Shepetin, and earlier his predecessor Ihor Shkurat, decided not to expose the scheme of their colleagues but took a direct part in it.

Shkurat and Shepetin previously worked in the SSU, after which they transferred to work in the SFS. Ihor Shkurat headed the Vinnytsia SSU administration. However, when another Vinnytsia native, Myroslav Prodan, became head of the SFS, Shkurat also moved to Kyiv. Connections with law enforcement and leadership ensured the existence of conversion centers, which Stanislav Khudar directly supervised.

«Khalkovskyi, Shkurat, Shepetin, Khudar covered members of an organized criminal group engaged in illegal money conversion using grain sent for export, as well as creating a fictitious tax credit. Using their official position, they resolved issues with unblocking tax invoices. In particular, Stanislav Khudar gave direct instructions to members of the organized criminal group on personnel, financial, and legal issues» - stated in the court’s decision.

The message states that among the companies involved in the scheme was PE «Farming Enterprise «Endless Horizon». The court decision states that the company covered illegal activities related to forming an artificial tax credit for enterprises in the real sector of the economy, as well as exporting agricultural products outside the customs territory of Ukraine under triangular contracts with non-resident enterprises registered offshore, in violation of customs and tax legislation of Ukraine, which led to non-return of foreign exchange earnings to Ukraine.

Stanislav Khudar declared in his 2017 financial obligations section that he borrowed 2,800,000 hryvnias from "Endless Horizon." In 2018 he again declared the same amount, meaning he did not pay anything back to the company during the year. This may indicate very favorable loan terms from a company suspected of tax evasion. There is an apparent conflict of interest.

Excerpt from Stanislav Khudar’s 2018 declaration

The «Endless Horizon» Farming Enterprise, in July 2019, changed its registration location to Kyiv (previously from Mykolaiv region, then Odesa). The company in Kyiv is registered at a massive company registration address.

Analytical system Youcontrol data

The Farming Enterprise «ENDLESS HORIZON» is on tax records in Kyiv and was created for the transit of «fictitious tax credit».

Between 2018 and September 2019, the enterprise purchased sunflower seeds for 58,324,800 hryvnias and sold for 58,880,000, simultaneously exporting sunflower seeds worth 26,513,100 hryvnias. In light of this, it can be concluded that the sale of sunflower seeds was only on paper without the product’s actual presence.

The supplier of sunflower seeds for «Endless Horizon» was «Trading Expo», which carried out the transit of «schematic tax credit» created by the enterprise «Trade Broker» (code 38895528) by replacing the nomenclature of purchased and sold goods, namely the purchase of «assorted vehicles» and sale of «Sunflower Seeds».

All enterprises involved in this scheme lack employees and material assets for operational activities.

The scheme of fictitious tax credit transit by «Endless Horizon»

AGRASUPPLYTRADE was created for the transit of «fictitious tax credit», namely the goods «CAS, nitroamofoska» for enterprises in the real sector of the economy. They realized goods worth 20,839,200 hryvnias in 2018 - September 2019. The main suppliers of «fictitious tax credit» were:

VERETENO (Kyiv) acquired «set of scoops, grill grate, commodity scales, pans, etc.», and sold «Nitroamofoska, CAS»;
IFSTAMP (Kyiv) bought «pans, sieves, mincers, scooters, chipboard, baseboards, etc.», sold «CAS»;
TOPNAPSERVICE (Mykolaiv) bought «dried fruits», sold «CAS, Herbicides Gardo Gold»;
TRITON IF (Kyiv) bought «set of scoops, grills, scales, furniture, air conditioners, etc.», and sold «Nitroamofoska».

No workers, premises, or warehouses have been found at these enterprises, indicating fictitious business activity.

The scheme for creating a fictitious tax credit by «Agrosupplytrade»

Farming Enterprise «Fairy Valley» was created for the transit of «fictitious tax credit», namely the goods «Corn, sunflower seeds» for enterprises in the real sector of the economy.

In 2018 - September 2019, 91,629,600 hryvnias worth of goods were realized. The main suppliers of «fictitious tax credit» were:

Family Farm «Native land» (Mykolayiv), acquired «oranges, lemons, mandarins, corn, etc.», and sold «Corn, peanuts»;
AS-INVEST GROUP (Kyiv) carried out transit of «schematic tax credit» formed by the «revolver» GRANDEYL (Kyiv). They acquired «trucks», and sold «Sunflower seeds»;
EURO-BUILDING GROUP (Dnipro), bought «bushings, swashplate automatics, construction services in assortment», and sold «Corn»;
CAPITAL PLUS SERVICE (Odesa) - acquired «copper castings, sunflower, construction works, modernization work, etc.», sold «Corn».
LYMERZ (Mykolaiv) - carried out transit of «schematic pс» formed by the «revolver» Family Farm «Native land» (MYKOLAYIV). Acquired «oranges, lemons, mandarins, corn, etc.», and sold «Corn, peanuts».

No workers, premises, or warehouses have been detected at these enterprises.

The scheme for the transit of «fictitious tax credit» by «Fairy Valley»

The company "Optima Group South" was created for the transit of «fictitious tax credit», namely the goods «CAS, nitroamofoska» for enterprises in the real sector of the economy. During 2018 - September 2019, goods worth 21,954,000 hryvnias were realized. The main suppliers of «fictitious tax credit» were:

EXPERT TRADE PLUS (Odesa) - acquired «Bananas, mandarins, lemons, dolls in assortment, toys, artificial flowers, etc.», and sold «Nitroamofoska, CAS, Herbicides».
TOPNAPSERVICE (Mykolaiv) acquired «dried apricots, dishes, lamps, cigarettes, etc.», sold «Nitroamofoska, CAS».
No workers, premises, or warehouses have been detected at these enterprises.

The scheme for the transit of «fictitious tax credit» by «Optima Group South»

All of the above-mentioned companies are involved in criminal proceedings. During the pre-trial investigation, it was established that they were engaged in illegal activities aimed at tax evasion on a particularly large scale, forming a fictitious tax credit, and VAT refund from the budget. The companies are registered at places of mass registration of companies in Mykolaiv, Odesa, Kyiv, constantly change the company’s managers and owners, have “bare” balances of legal entities, and do not have employed workers. All this indicates the fictitious nature of their activities.

As a result of illegal actions by speculators from the fiscal service, the budget annually lost millions of hryvnias. According to experts’ estimates the Ukrainian budget loses 100-150 billion hryvnias annually due to tax evasion, and the existence of «conversion centers».

The turnover of the aforementioned scheme is 1.2 billion hryvnias. The annual profit of 400 million hryvnias ended up in the pockets of officials who covered the scheme.

Law enforcement agencies continue to investigate the criminal case against the officials of the State Fiscal Service, but how it will end is unknown. Despite suspicion of abuse of office, they continue to hold their positions.

One wants to believe that under the new authorities, we will not have to wait long for imprisonment sentences for corrupt officials. The public will continue to monitor the progress of this case.

Oleh Boyko