Operation Furação prosecutors finally have filed charges against 42 defendants. Various instances of qualified tax fraud are claimed to have lost the State over €10 million in a scam running between 2001 and 2010.
The Public Prosecutor's Office has filed an indictment as a result of ‘Operation Hurricane’ which has supplied evidence that 42 defendants used fraudulent billing systems involving individuals and companies to evade tax.
These schemes were intended to provide national companies with the use of companies outside of Portugal, many of them in the UK and Ireland, which issued false invoices for imaginary services, or for purchases at vastly inflated prices, thus reducing Portuguese corporate tax liabilities.
The funds generated were channeled to offshore tax haven accounts of whcih the directors of the Portuguese companies were beneficiaries and paid no personal income tax on the funds when drawn down.
Operation Furação, ‘Hurricane’ in English, began in late 2005 with searches made at Banco Espírito Santo, MillenniumBCP, Banco Português de Negócios and Finibanco where evidence was unearthed relating to transfers that indicated tax fraud and money laundering had been going on involving individuals and Portuguese companies.
The scheme was dreamt up by management at Banco Espírito Santo and its subsidiaries which charged 5% of the gross amount as a rather convenient handling fee.
In January this year there were an estimated 700 defendants, but more than 300 already had opted to pay up when it was discovered they had been involved in cheating the taxman in the cunningly designed scheme.
Luís Figo, the former football player turned businessman, become enmeshed in Operação Furacão as a 2002-2005 ‘image rights’ contract with Galp Energia led to a suspicious transaction for €399,000 through the Figo company, Lunarstar Limited.
The founder of the civil engineering company Mota-Engil, António Mota, first was accused of fraud in 2009 as part of Operation Furação but the inquiry into his dodgy dealings only concluded in May 2016, proving that he had been involved the tax scam.
António Mota and his sister, Maria Manuela Mota Santos, accepted a proposal by a BCP subsidiary to use a British company to overcharge for machinery delivered to Mota-Engil. The British company, Intrade, invoiced Mota-Engil €32 million between 2001 and 2005 which was €7 million higher than the costs of the equipment.
This surplus was transferred to an account at BCP in the Cayman Islands (pictured) on behalf of Aryllus Holdings which was controlled by António Mota and sister who paid themselves from this account and paid no income tax.
Mota-Engil’s founder was offered a deal: pay €6 million and the State will drop its charges of ‘qualified tax fraud.’ The money was paid, the fraud charges were suspended and will be dropped completely in 2018.
The remaining 42 defendants either have insufficient funds with which to pay the back taxes and fines, or are gambling on being acquitted.
