Money Laundering & VAT Fraud Acquisition Against Lycamobile
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A trial for money laundering and value-added tax (VAT) fraud between 2014 and 2016 started on June 12, in Paris against 3 of Lycamobile France’s executives and 8 individuals.
The Court of Paris is investigating Lycamobile, a network of trading companies and front companies operating in the La Chapelle district of Paris, for laundering 17 million euros over 7 months and conducted a trial against three managers and eight others accused of money laundering and VAT fraud. A leading owner of television and radio stations in Sri Lanka, Subaskaran Aliraja, owns Lycamobile. Furthermore, the firm is interested in acquiring state-owned Lanka Hospital PLC and Lanka Telecom PLC.
Sources claim that the investigation was launched in early 2016, although the company, defending itself against infringement, has said that a “system” has been set up “without their knowledge.” According to the investigation, construction companies engaged in a circular operation in exchange for false invoices by transferring and checking companies.
Lycamobile sold construction companies sim cards and phone recharges, but these items never reached them. Lycamobile’s sales representatives resold these products to stores in the 18th arrondissement of Paris. North Africans and Africans, as well as Indo-Pakistani communities with a desire to call abroad, provided a resale market for prepaid cards and top-ups.
A company spokesperson said, “This procedure shows very clearly that filter companies and construction companies have organised and implemented a system to remunerate work concealed by a game of SIM card resales without the knowledge of Lycamobile. Therefore, We cannot hold Lycamobile responsible for implementing this illegal scheme which is foreign to it.”
There is a suspicion that VAT fraud has been committed in the telephone sector based on the “misuse” of a legally derogatory regime. Lycamobile Services allegedly resold all taxes-included (TTC) telephone products from Lycamobile France at a price excluding tax (HT), thus benefiting from the VAT refund. An “arrangement” between the two sister companies is claimed to have enabled Lycamobile Services to resell the products.
As part of the investigation, Lycamobile France, Lycamobile Services and Alain Jochimek, their managing director, are accused of laundering or misappropriating corporate assets and concealing their involvement in an organised crime syndicate. A VAT fraud trial has been initiated against Lycamobile Services and Alain Jochimek. There are also 8 other defendants on trial for one or the other offence, believed to have been involved in this scheme in some capacity.
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