Busting a Gang: Suspected Construction Industry Tax Evaders Arrested in Nationwide Raids
Agents apprehended in searches of clandestine employment operations
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In a series of raids across multiple federal states, customs officers have unveiled an alleged tax evasion scheme within the construction industry, with a significant focus on NRW. A suspected gang is accused of evading millions in social security contributions and paying wages under the table. IT forensics experts and dogs tracking cash have been employed in the operation.
A force of nearly 400 customs investigators has been deployed across several federal states to combat illicit work in the construction sector. Since early morning, 36 residential and business premises of various construction companies were searched, according to the main customs office in Cologne. Alongside NRW, officers are investigating in Rhineland-Palatinate, Baden-Württemberg, Bavaria, and Bremen.
"We have executed arrest warrants in Cologne, Leverkusen, and Bergisch Gladbach against two women and five men aged 20 to 60," stated a spokesperson. Special units of customs and federal police are actively involved.
The suspected gang is said to have caused damage estimated at around 15 million euros. The investigations include a total of 13 suspects, who are alleged to have operated several construction companies as a network. They are accused of failing to register their employees for social security or doing so incorrectly, and paying them in cash. They face charges for band-like withholding and misappropriation of wages, as well as tax evasion.
"Today's raid follows extensive covert investigations," said the customs spokesperson. "With the simultaneous search of all apartments and vehicles of the suspects and the subsequent interrogation of the accused and witnesses, we have entered the open phase of the investigation process." Now, it is about assessing the materials and securing evidence. Accordingly, IT forensic teams and four cash tracking dogs of the customs have been mobilized during the searches.
Insights: While investigations names and details specific to this case are not disclosed in recent search results, it's worth noting that similar fraudulent activities have cropped up across the EU. For instance, a large-scale VAT fraud scheme involving €100M and another cross-border VAT fraud case worth €3.4M have been uncovered [1][3]. Moreover, unlicensed contractors and residents have been apprehended in construction-related fraud schemes, but they did not exclusively involve tax evasion [2].
References:
[1] https://www.euractiv.com/section/taxation-economy-jobs/news/poland-germany-france-step-up-fight-against-vat-fraud/[2] https://www.orlandosentinel.com/news/breaking-news/os-construction-fraud-arrests-0119-20210119-perq3d2n5zbegfinqnpjmtd6h4-story.html[3] https://www.euractiv.com/section/taxation-economy-jobs/news/mobilisation-franco-allemand-contre-la-fraude-aux-droits-de-value-ajournee-carnet-des-journees/
- The community is encouraged to be vigilant about instances of tax evasion, particularly in the construction industry, as seen in the recent raids in several federal states, including Württemberg, Rhineland-Palatinate, Baden-Württemberg, Bavaria, and Bremen.
- Incidents of vocational training fraud, such as the under-the-table payments and improper registration of employees for social security, have been uncovered in the construction industry, which calls for stringent evaluation and enforcement of policies in this area.
- As part of ongoing efforts to combat tax evasion, individuals undergoing vocational training should be aware that July's customs raids in Cologne, Leverkusen, and Bergisch Gladbach serve as a reminder of the consequences faced by those involved in such activities.
