Hradec Králové - It was supposed to be petroleum for ship transport, exempt from consumption tax. However, instead of fuelling ships on Labe, it fuelled regular cars on the roads, as it was sold at petrol stations.
By evading taxes, oil dealer Jindřich Pecka robbed the state of 190 million CZK in 2005, which can be compared to the legendary fraud with fuel oil.
Last week the Regional Court in Hradec Králové sentenced Jindřich Pecka to 9 years in prison, while his companion Jiří Otáhal was cleared of charges.
According to the charges, both men took part in illegal business activities with motor oil, having robbed the state coffers of 190 million CZK. However, the court came to conclusion that Otáhal took zero part in it and everything was run by Jindřich Pecka.
"He dealt with suppliers and subscribers, he signed contracts and collected money," said Judge Petr Mráka. "On the contrary, Jiří Otáhal was only a stool pigeon who didn´t take any part in the oil trade," he added.
Not a single drop for ships
Pecka´s defender didn´t agree with the verdict and filed appeal. The case will then be investigated again by the Supreme Court in Prague.
According to the prosecution, from April to September 2005, both men were buying motor oil, claiming it would be used in ship transport. This enabled them to buy it without the consumption tax.
"However, they sold the petroleum below cost to the firms supplying regular petrol stations," stated Dagmar Pětníková, the state prosecutor.
The accused men gained the tax-free petroleum from oil companies, such as AGIP, Slovnaft and ÖMV. They submitted documents, proving that the fuel was used in ship transport and thus they could buy the fuelwithout tax.
"Overall, they bought 20 million litres, however, not a single drop was intended to propel ships," stressed the prosecutor. "Then, in their tax declaration, they declared only a fractional amount of the purchased petroleum and they didn´t even pay VAT," she added.
The whole fraud was based on the same principle, as the recent billion-crown tax evasions in light fuel oils (LFO) trade. The reason is, LFO and petroleum are very similar but it LFO is sold without tax.
Again, the accused men realized the petroleum used in ships and cars is the same fuel. They then used the tax exception and cashed 190 million within six months.
Discovered by regular inspection
Illegal business activities of Bohemian Paradise s.r.o, whose sales manager was the accused, Jindřich Pecka, were revealed during a routine inspection by state inspectors. "At first sight, the deals looked all right. But later, the discrepancies were discovered by investigation of the Customs and Financial Authority in Jičín," the state prosecutor stated. "Later, it turned out that the tax evasions were enormous."
The petroleum traders spent some of the earned money, however, they hode most of the money abroad. The millions earned by their criminal activity then ended up on bank accounts of a number of foreign companies.
"And these companies are linked to the accused, Jindřich Pecka," says Petříková, the prosecutor. In one case, the money was transferred even to Liechtenstein and ended up on the bank account of a charity organization," she added.
Similar case with paraffin oil?
A similar case is now investigated by customs officers. They are checking activities of a Czech aircraft company. According to the primary investigation, the company purchased over 18 million litres of paraffin oil used in aircrafts.
However, the company´s aircrafts consume only 2.5 million litres on average.
Therefore, the firm is suspected from selling the rest of the fuel to regular petrol stations and making huge profits.
The tax evasion would then be 157 million CZK. "At this moment, tax investigation is in the process and it is not closed yet. Therefore, no specific details can be disclosed," said Jiří Barták, the spokesman of the Czech Customs Headquarters.
