Largest fraud case in Portuguese history

A COURT case into fraudulent bullion dealing involving 29 defendants and scores of companies opened in Porto last week.

The defendants are charged with defrauding the Portuguese state out of tens of millions of euros in taxes over a 10 year period.

It is the fourth court case to be held simultaneously in various Porto courts and heard by a team of police teams, judges and sworn specialists.

The millions of euros lost in state taxes derive from the illicit trade in gold bullion, namely gold bars, which were imported from an EU country into Portugal without paying any importation tax or VAT, using phantom and smokescreen companies, some fronted by people in name only.

The carousel fraud also involved complicated financial mechanisms which lead the tax authorities to make deductions on VAT that had never been paid in the first place.

For years, the gold bar market in Portugal suffered devaluation because of millions of euros of VAT tax evasion resulting in share quotes on the London stock exchange for Portuguese gold to be less than 1,000 euros.

The fall in gold prices in Portugal was unwittingly financed by the tax authorities since they were not in fact being taxed by VAT.

Considered one of the largest financial frauds ever to be detected in Portugal, the scam was detected by a routine inspection carried out by the Inspectorate-General of Economic Activities.

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