The Hajdú-Bihar County Prosecutor’s Office brought charges of budget fraud and other crimes committed in connection with employment and dividend payments against a local large entrepreneur, his lawyer’s assistant and several company managers, who caused a financial loss of nearly one and a half billion forints to the budget.
According to the indictment, the man from Hajdúszoboszló managed several well-functioning companies that engaged in illegal wage payment practices. The workers registered for the minimum wage were paid in a separate envelope, without their employers paying the public charges for their actual wages. As the actual head of the enterprises, the man caused a financial loss of HUF 20 million to the state budget.
Under the management of the defendant, several companies operating in the field of transport, trade, and hospitality were established, which operated successfully. The big entrepreneur lived in Hungary, but in the meantime, he gave the impression that he had liquidated his domestic life and settled abroad, bought an apartment in the United Arab Emirates, and founded businesses, but in reality, they did not work. With this, the man gave the impression that he did not have to pay taxes in the country. Based on the applicable national tax rules, the payment of dividends is subject to a personal income tax of 15%.
Using this method, five companies paid a total of HUF 7.3 billion in dividends to the man between March 2017 and December 2019, after which the paying companies had to declare a total of HUF 1.1 billion in taxes.
In order to hide the criminal origin of the untaxed profits taken from various companies, the man-made transfers, currency exchanges, and investments between various foreign bank accounts, using this method to launder a total of more than HUF 700 million.
During the multi-year investigation of the competent directorate of the National Tax and Customs Administration, more than HUF 868 million was recovered from the financial loss caused.
The Hajdú-Bihar County Prosecutor’s Office accuses the entrepreneur, who admitted to the crime, of the more serious crime of budget fraud and money laundering, the crime of falsifying a public document, and the misdemeanor of using a false private document. The General Prosecutor’s Office also brought charges against four other people involved in the companies and a lawyer who assisted in the commission of the crime.
He proposed a prison sentence for the entrepreneur and the lawyer, as well as a fine and ban from employment, and the imposition of lighter sentences for the other company managers. In addition, the General Prosecutor’s Office proposed that the Debrecen Court impose a fine as a sanction applicable to companies involved in crimes as legal entities.