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Trio arrested for 4.6b yuan VAT fraud
From:Shanghai Daily  |  2020-11-18 09:29

The Minhang Districtprocuratorate has approved the arrest of three men who are accused of writing false value-added tax invoices, involving over 4.6 billion yuan (US$700.6 million).

In 2018, Zhou and Hou were introduced to each other by Zhou’s cousin, according to prosecutors. Hou wanted to get involved in gold processing with a state-owned enterprise, and he allegedly requested Zhou to act as a go-between and introduce him to a leader whom Zhou knew.

After being briefed by Zhou, the leader was said to have agreed to his business proposal. Not being aware of Hou, the leader asked Zhou, as a deputy general manager of the SOE, to be in charge of the operation.

In February 2019, the business started. For each transaction, Zhou allegedly only needed to stamp contracts after Hou matched buyers and sellers.

Zhou doubted the huge contracts but remained silent in order to receive a 230,000-yuan commission, say prosecutors.

Within four months, Zhou allegedly bought 15 tons of gold and 133 tons of electrolytic copper in the name of the SOE and signed fake processing contracts with 10 firms for false invoices and dodging taxes.

In June last year, Zhou washed his hands off this illegal business. His work was taken over by Xie, a legal adviser of the SOE, say authorities.

A year later, the tax fraud case started to raise suspicions and Minhang economic police began an investigation.

The Minhang procuratorate yesterday approved the arrest of Zhou, Xie and another man.