How did 70 customs and tax officials get involved?

Of the 122 defendants prosecuted in three recent economic cases, 70 were former customs and tax officials.

Khanh Binh Border Gate Customs Branch, where dozens of leaders and officials colluded with businesses to embezzle hundreds of billions of VND in VAT refunds. Photo: N.DUC

In March and May 2016, the Supreme People's Procuracy and the Ho Chi Minh City People's Procuracy completed the indictment for three cases of fraud and appropriation of hundreds of billions of VND in value-added tax (VAT) refunds that occurred in Ho Chi Minh City, An Giang and several other provinces and cities.

Of the total 122 defendants prosecuted in the three cases, 70 are former officials and leaders of Khanh Binh Border Gate Customs Branch (An Giang), Ho Chi Minh City Customs officers, tax officers...

Three familiar tricks

According to a leader of the Ministry of Public Security's Investigation Police Agency, to appropriate VAT refunds, businesses often apply three tricks.

First, establish enterprises in Cambodia and Vietnam, then these enterprises sign foreign trade contracts with each other to export goods from Vietnam to Cambodia. Second, enterprises use the legal entity of enterprises established in Vietnam to buy fake invoices to legalize inputs. Third, create documents for payment of foreign trade contracts by creating documents to bring money from Cambodia to Vietnam and pay money from the current account of the company in Cambodia to companies in Vietnam.

Next, these businesses collude with customs and tax officials to create export documents to Cambodia with a quantity of goods many times higher than the actual quantity exported...

For example, in the case of Le Thi Chi and her accomplices, the Supreme People's Procuracy has indicted 52 defendants for fraud and appropriation of property; illegal trading of invoices and abuse of position and power while performing official duties. Among the defendants, 34 were former leaders and officers of the Khanh Binh Border Gate Customs Branch (An Giang).

From May 2011 to March 2013, Le Thi Chi (An Giang, director of Kim Chi Import-Export Company Limited) and her accomplices used the legal entities of Kim Chi Company, Phuong Phuong Tung Company and Dan Thanh Do Enterprise to illegally buy and sell 2,381 VAT invoices with many enterprises in An Giang and Ho Chi Minh City. The amount of purchase and sale falsely recorded on the invoices was more than 400 billion VND.

When he had invoices and payment documents for purchased goods, Chi continued to collude with two companies in Cambodia to create fake export contracts for items such as mobile phones, household appliances, flour, etc. with a total value of goods listed on the invoices of more than 400 billion VND, then created a VAT refund application. In total, Chi received a refund of nearly 42 billion VND from the state budget.

Customs support effectively

To successfully carry out the tax embezzlement, Chi colluded with Mr. Nguyen Thanh Tri, Head of Khanh Binh Border Gate Customs Branch from 2008 to August 2012 and his successor, Mr. Nguyen Van Bien (Head of the Branch from 2012 to October 2013). Mr. Tri and Mr. Bien directed their subordinates to falsely confirm the export declarations of Chi's and his accomplices' companies. In return, Chi agreed to pay the customs 200,000 VND/export declaration and 0.3% of the value of the goods recorded on the export customs declaration.

According to Mr. Tri's instructions, each day the "tip" money received from the Branch was collected by the team leader on duty and divided according to the ratio: the branch director got 40%, the deputy branch director got 12%, the team leader and the three officers on duty each got 12%. In addition, Mr. Tri was also given three separate bonuses by the Branch, totaling 15 million VND.

The prosecution agency determined that from 2010 to 2013, 34 leaders and officers of Khanh Binh Border Gate Customs Branch completed procedures, falsely confirmed, and stamped “exported goods” on hundreds of export declarations with false quantities and goods for Chi’s three companies and received nearly 1.7 billion VND. Of which, Mr. Tri illegally benefited 356 million VND; Mr. Bien benefited 261 million VND…

Tax leaders know it's wrong but still do it

In September 2013, at the request of the General Department of Taxation, the Ministry of Finance, the General Department of Security, and the Ministry of Public Security received documents about many people in the southwestern provinces establishing "ghost" enterprises to buy and sell VAT invoices to appropriate tax refunds from the State.

Through investigation, the investigation agency determined that Pham Thanh Dung established the companies Tan Thanh Loi, Tan Loi Kim, Tan Thanh Loi An Phu in Khanh An commune, An Phu district (An Giang) to commit illegal acts. Dung bought 2,076 fake invoices from many domestic enterprises and used the invoices of the three enterprises he created to issue to each other to create fake documents and records, then forged foreign trade contracts and forged export records. With the help of many customs and tax officers, Dung embezzled 45.4 billion VND in tax money.

For each tax refund file, Pham Thanh Dung gave Mr. TĐD (Deputy Director of An Giang Province Tax Department - passed away in 2013) 40 million VND; and gave Mr. Nguyen Thanh Tung - former Head of An Giang Province Tax Accounting and Declaration Department 8 million VND. Many other officials of An Giang Province Tax Department also received money from Dung to help Tan Thanh Loi Company get a tax refund of nearly 24 billion VND.

Similarly, for each file, Dung paid 20 million VND to Mr. Vo Thanh Ngoan, Deputy Head of the Tax Department of An Phu District, An Giang, and gave gifts and envelopes worth 5 million VND to Mr. Duong Hoang Yen, Head of the Tax Department of An Phu District. From August 2012 to April 2013, Mr. Yen and Mr. Ngoan signed to approve 20 tax refunds for Dung's two companies with a total amount of more than 90 billion VND.

Notably, in this case, many customs officers at Khanh Binh border gate, An Giang continued to be "in trouble" when receiving money from companies with Pham Thanh Dung as director at a rate of 0.3% of the total value of exported goods on each export declaration...

According to PLO