Russia’s FSB security service and Investigative Committee on Wednesday announced the arrest of several people they say were involved in a large-scale tax-evasion operation that utilized thousands of shell companies to generate more than 1 trillion rubles ($13.2 billion) in fraudulent deductions.
Law enforcement officials said the group organized a “paper VAT” scheme, a term used for the mass issuance of fake receipts. Since 2023, the operation allegedly sold forged invoices to nearly 40,000 Russian companies to help them illegally lower their value-added tax obligations.
“These forged invoices were unlawfully included in tax filing documents submitted to the tax authorities,” said Svetlana Petrenko, a spokeswoman for the Investigative Committee, Russia’s top investigative body.
Federal investigators said the organizers, who have not been named, were charged with the illegal formation of a legal entity and the unlawful circulation of payment instruments.
The FSB said the ringleaders were previously convicted of financial crimes and that the network included more than 4,800 transit organizations.
Police conducted more than 30 raids across Moscow, St. Petersburg, as well as the Perm and Belgorod regions, targeting both the facilitators and the businesses that benefited from the fraud.
The bust is the second major crackdown on VAT fraud in a week, according to the business newspaper Kommersant. It reported that the client list of the “paper VAT” scheme included major state-affiliated manufacturing and construction firms.
Investigators are also reportedly looking into a tax consultancy known as Tax Doctor, which operated under the brand White Optima, Kommersant said.
