Swedes suspected of massive tax swindle

The men, co-owners of Norrtälje’s electronic superstore El Giganten, used a private Swedish company called First-In-West AB to purchase nearly 3 billion kronor worth of mobile phones from Dubai.

Lennart Sennmark, an investigator at the Swedish Tax Agency, said the duo told the government it was going to export the phones to Spain and Portugal and wanted an exemption from Sweden’s import tax. Lennart said his investigation has showed the two men did not send the phones on to Spain, but shipped them to Great Britain instead.

“We know the companies in Spain are a front, that they do not exist,” Sennmark said to The Local on Monday. “We know the phones were sent to Great Britain instead, where they were sold to company A, which sold them to company B, which sold them to company C, and then on to company D.”

Sennmark said company D would then sell the phones back to the original Dubai company. D would then request a return of the sales tax paid to the British government when buying them from company C.

“It is just a carrousel,” Sennmark said. “The phone would just come back through Sweden again, and the money made from the VAT refund in Britain was profit.”

Sennmark said the investigation has so far discovered some 655 million kronor worth of tax evasion. He said Great Britain was mostly badly hurt during the crime, but Sweden lost money by forgoing the import.

A Swedish court ordered the Norrtälje pair to pay up some 75 million kronor in damages, but Sennmark said there was a small chance of getting that much. He said the investigation is still ongoing and that if other false deals are found, the amount ordered to pay up could continue to increase.

He said it was up to a prosecutor to decide if jail is a possibility, and added that it is possible the two could end up paying just a small fraction each month in retribution.

When asked why the two won’t face prison time for their multi-million kronor tax fraud, Sennmark said, “Well, that is a problem. I’m not a prosecutor and these two men have to be charged in accordance with Swedish law.”