Fake invoice firm gets busted in Zhejiang province
Today the Nanhu Evening News features the headline: “The largest underground tax-evasion scheme in the history of Jiaxing gets busted.” The story details how a firm was recently caught specializing in producing fake tax invoices (fapiao 发票) to aid in tax evasion and money laundering. There is over a hundred million yuan involved in the case, which is spread across 12 different Chinese cities.
The article starts out by asking readers to recall a certain intersection, where people holding stacks of business cards wander through the cars during a red light, jamming cards into open windows. These cards all say the same thing: “Our company has been producing all kids of invoices for a long time…” Advertisements were also sent out by SMS and through other online channels.
That was probably not the wisest way to promote the development of an obviously illegal enterprise, because local police were able to follow the information on the card and bust the whole operation in one fell swoop. On the night of May 24, ten policemen arrived at the company’s offices and found a man and a woman there. They arrested them both and confiscated computers, printers, an array of false official seals and other evidence. Within two days, they had arrested nineteen other suspects in Jiaxing, Ningbo and Taizhou cities, and seized over 100,000 fake invoices. More than 300 fake official seals have confiscated.
The reporter of the Nanhu Evening News somehow caught up with Li Mo, one of the arrested suspects, and interviewed him about it. Li started out by making business cards, but found he couldn’t cover his expenses. Business was slow, so he started offering fake invoices. He charged fifty yuan per fake invoice. Once, a woman came in and ordered 175 fake invoices, for a total price of 8,750 yuan.
Who buys fake invoices? Li told the reporter the invoices were purchased by business and individuals who wanted to falsify costs for tax evasion, company expense reimbursement and other purposes. The phenomenon is common across many industries, including construction, decoration, advertising, catering, etc. Even large pharmaceutical companies and the Jiaxing courier company, Express, have been caught using fake invoices.
In 2010, the Xiuzhou police cracked down on a similar case of fake invoices, and seized 120,000 of the fake documents. There has since been a legal crackdown, and the crime is now punishable by a fine, and two to seven years’ imprisonment.
The Nanhu Evening News is a daily newspaper based in Zhejiang province. It is under the Jianxing Daily Press Group.
Links and Sources
Nanhu Evening News: 嘉兴史上最大“地下税务局”被捣毁