Thessaloniki Nightlife Tax Fraud: 18 Arrested Over €203M

A new multimillion-euro tax evasion case has come to light following large-scale inspections by the Independent Authority for Public Revenue (AADE) at more than 10 nightclubs in Thessaloniki. Authorities made a total of 18 arrests, including business owners, men and one woman, who used “straw men” and fake managers to cover up their activities.

According to reports, during the major operation by AADE’s Financial Transactions Control Units (DEOS), hidden ledgers and financial records were uncovered, revealing the activity of an extensive ring that systematically concealed income. The 18 defendants were taken to court at noon on Saturday, November 7, while AADE officials continue to comb through accounting books and transactions made through POS terminals.

Speaking on the TV show “Exelixeis Tora,” Antonis Koudroglou, the lawyer for five of those involved, said his clients’ first reaction was that they were completely unaware of the charges. He also said that during the preliminary investigation, they were not given access to the case file, so they were unable to know the inspectors’ findings in order to give the necessary explanations.

“We are waiting to receive the case file and respond to the prosecutor who will handle it immediately, and then to the investigating judge. If charges are brought, they will be felonies,” Koudroglou said.

Asked whether his clients did not know what was happening in Thessaloniki or did not take part themselves, the lawyer replied: “It is obvious that they did not know about this volume of activity, about this scale of damage we are talking about. And to put things a bit more simply, there are many ways to calculate the damage.

“If a company was set up and then carried out activities very different from those it was created for, you understand that someone who professionally set up that company cannot have known about it. But we need to sit down, study and analyze all of this, so that we too can help justice be served properly.”

The Names That Could Shake Thessaloniki’s Nightlife

Koudroglou confirmed reports that once the names involved in the case are made public, the city’s nightlife will be shaken. “From what we also heard during this preliminary investigation, it is true that these are very well-known names in Thessaloniki’s business world,” he said.

“The arrests of my clients by AADE began yesterday morning, from 9 a.m. I tried to get in touch. It was clear that a preliminary investigation was underway and we were not allowed to have contact. The AADE officials did a very big job.

“And this morning I saw my clients for five minutes at the Thessaloniki Police Directorate holding cells, after the process had ended. They did not know anything. The charges were not formally read to them in the sense we know. The case file is enormous, with a great deal of evidence. We will obviously look at it during the investigation.”

Regarding the woman among those arrested, Koudroglou made clear: “I should also say about the businessman’s wife that she has nothing to do with this. It was an unfortunate moment when the authorities went to arrest the businessman. He was not there, but his wife was. During the search, a weapon was found that is an antique. The wife did not know enough to provide the license details, and for that reason she was arrested for weapons possession. She is not involved, let’s make that clear. This woman is not involved in the case.”

How the Ring Operated

The fraud relied on hundreds of straw men and ghost companies that accumulated debts and obligations to the state.

Among the 18 people arrested is a well-known actor and model who served as one of the straw men. He admitted he was paid between 200 and 700 euros a month to be used in this way.

The most tragic aspect of the case is that the perpetrators even recruited people with serious health problems. They mainly sought straw men outside the Theageneio Hospital in Thessaloniki and the Agios Savvas Hospital in Athens. The ring approached them and persuaded them, for a small fee, to appear as company managers.

These individuals had no real involvement in running the businesses, which operated with the sole purpose of creating debts that would never be repaid.

Debts Worth Millions

The investigation by AADE’s DEOS inspectors found that over the past three years, the ring used 4,200 tax identification numbers (AFM) to accumulate debts of more than 203 million euros. The debts include 68 million euros in VAT and income tax owed to AADE and 135 million euros in social security contributions owed to the e-EFKA social security fund.

The investigation extended to more than 700 business locations in Thessaloniki, Halkidiki and other parts of the country, where over the past few years more than 2,000 businesses operated in the food service and nightlife sector, using 1,300 straw men and 700 hidden individuals. In total, more than 4,200 tax identification numbers are involved in the case.

The Hidden Businessmen and the Straw Men

Through months of investigation, inspectors managed to identify the businessmen who were actually running the operations while hiding behind people who formally appeared as managers and sole partners of the businesses.

They are well-known nightlife entrepreneurs who own dozens of very popular bars and nightclubs in Thessaloniki and Halkidiki.

The 4,200 tax identification numbers operated at more than 700 addresses. Their common feature was that in every case, the managers and sole partners were individuals acting as straw men. Cross-checking this data was the key to uncovering the ring.

The Key Role of Accountants and a Lawyer

Three accountants and a lawyer played a central role in the ring’s operation, organizing the setup of the companies and managing the “front” of straw men.

The lawyer used forged authorizations, constituting felony offenses, so that the businesses could obtain licenses from the municipality, the fire department and health authorities.

A telling sign of the lifestyle of those involved is the luxury trips some of them took to exotic destinations, posting the photos on social media.

Weapons, ammunition magazines, expensive watches and cash were found in the luxury villas of one of the businessmen.

Source: tovima.com