UK tax avoidance suspects in the spotlight

Tax avoidance in the UK is big news in recent weeks, with Google managing to avoid paying a huge amount of back payments by striking a deal with the UK government.  Controversial indeed, costly without a doubt, unique - not in the slightest.

Take for instance the following. According to this journalistic investigation, it was established that a member of the Board of Directors of a notorious bankrupt bank "Electronica" had earlier participated in a potential tax avoidance scheme in the UK.

According to information published on, with regards to a court case between the state of the United Kingdom (represented by the Inland Revenue) and Luxembourg bank Banque Internationale, the investigators discovered that the basis of this trial concerned appeal notices submitted by the bank upon the fact of its involvement in a potential tax avoidance scheme. As a result of the hearing, the bank notices were rejected, and the charges remained in force.
The details of the trial show that the case concerned a convoluted tax avoidance scheme, financial and bank facilities for which, were provided by the Luxembourg bank.

As a result of the scheme implementation, a number of UK resident companies were sold to several Irish companies controlled by a few individuals residing in Monaco. Amongst these individuals, the investigators found the same member (mentioned earlier) of the Board of Directors of Electronica, whom, as it turned out, associated with certain Russian companies that brought damage to the government.

In other words, the bankruptcy of "Electronica" caused damage primarily to the State.

Back in 2009 the Head Investigation Administration of Chief Administration of Internal Affairs of Moscow, launched a criminal case citing Article 196 of Criminal Code of the Russian Federation ("Premeditated Bankruptcy"). The ruling declared, that in 2007-2008 the credit agreements had been concluded between the Bank and approximately thirty legal entities - "TechProgrammService Ltd.", "Yurservice Consult Ltd.", "Audit Omega Ltd.", "Interim Ltd." and others. The total amount of loans granted under the agreements mentioned above was almost 9 bn rubles, all non-collateral. The debts were never repaid. The legal entities were absent at their registered addresses, and the addresses themselves being the same (in some cases the addresses concurred with the address of Bank "Electronica").

There were a lot of scandals concerning the bank that have not yet fully settled. There were many versions regarding whom had built the scheme of withdrawal of assets from the bank, its details having been published by "Novaya Gazeta" (#45 of April 25, 2015.

However, now, after the "Irish story", the investigators stated that it was the previously mentioned member of the board of directors of Electronica, who had experience of building schemes of this kind, and possibly may have been him who stood behind building the money withdrawal schemes from the aforementioned bank.

The fact that he is an American citizen adds interest to the revealed data and may well add political character and intrigue to his involvement with the "Electronica" story.

As for Ireland, the potential suspect acted in unison with other individuals, also residents of Monaco, their connection having been established by the Special Compliance Office. Altogether, he was a director of five Irish companies, all of them having been dissolved as of today.

Other directors of the companies using tax avoidance schemes, were also identified (see here), and were directly mentioned in the materials of a court trial with the bank "Banque Internationale a Luxembourg SA".

Connection to these persons is also proved by another source: which shows that, besides one of the dissolved companies "Control System International", two of the potential suspects were directors in many other companies.

In total, the group of individuals mentioned in the court trial, had acquired thirty to forty targets by 1992, all these objects being actively used in tax avoidance schemes. In each case, shortly after the change of ownership, the target company made a large contribution to an employee share ownership trust established by Abbey, the company of which one of the suspects was a director and owner, together with his wife.

Total amount of tax unpaid, in the opinion of the UK Government, as a result of the aforesaid illegal scheme, reached £150 million.
The investigators were unable to acquire statements or comments from the parties involved.

So it goes to show, that Google and other major companies recently "outed", are not the only players in the global tax avoidance scandal.

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