A top fraudster behind a tax scam in France using EU carbon emission rights was sentenced to nine years in prison Wednesday (13 September) as authorities press ahead with prosecutions over the €1.6 billion scandal.
Twelve people were sentenced in Paris for taking part in an international network of VAT trickery and money-laundering, with fugitive businessman Cyril Astruc receiving the harshest nine-year sentence.
He was convicted in absentia for being the “main organiser and the principal beneficiary” in a network found guilty of defrauding French authorities of €146 million between 2008 and 2009.
Only three of the defendants who faced charges ranging from fraud, organised crime to money laundering attended the sentencing hearing on Wednesday.
Turkish bank Garanti Bankasi was ordered to pay a fine of €8 million for money laundering.
Also on Wednesday, magistrates investigating another network centred in the southern city of Marseille sent 36 people to trial suspected of a €385 million scam from 2006 to 2009.
The carbon trading scandal is thought to be one of the biggest tax conspiracies in France, costing local authorities €1.6 billion in lost revenue and some €5 billion at the European level.
Under a European Union trading system, limits are placed on the amount of carbon dioxide companies may emit, and those who want to pollute more must buy permits on different exchanges around Europe.
The fraud involved buying carbon permits in one EU country from another, free of VAT, then selling them on with the VAT added to another buyer.
But instead of declaring the VAT and paying it to the relevant tax authority, the trader pocketed the money and used a series of front companies to make the scam hard to detect.