The SSU jointly with the Bureau of Economic Security exposed a large-scale scheme of embezzlement of budget funds.

The top officials of the Main Directorate of the State Tax Service in Lviv region are involved in the scheme.

They organized illegal refund of the VAT to local enterprises. This should have allowed them to ‘withdraw’ over UAH 40 mln (USD 991,000) from the state budget.

However, Ukrainian law enforcement agencies blocked the scheme and identified its participants.

According to the investigation, the officials involved affiliated commercial entities engaged in import and sale of consumer goods.

The merchants sold wholesale consignments of foreign products for cash, but in tax reports they stated that they failed to sell the goods, and they supposedly remained stored in warehouses.

Then these entrepreneurs applied for VAT refund. The reason was that they had paid the said tax on import, but allegedly could not sell the goods, so they supposedly legally claimed for refund.

While checking the relevant documents, the tax authorities ‘turned a blind eye’ to the absence of goods and even warehouses where the products were supposedly stored.

After receiving budget money on the accounts of enterprises, the entrepreneurs withdrew funds to shadow economy and converted it into cash through controlled companies.

Based on the SSU’s investigation, three officials of the regional department of the State Tax Service were served notices of suspicion under the Article 364.2 of the CCU (abuse of power or official position).

Court is to choose a measure of restraint.

The investigation was carried out by the SSU and the Bureau of Economic Security under the procedural supervision of the Prosecutor General’s Office.