Criminal penalty for creating a fictitious business

The court found a resident of one of the district centers of the region guilty of a criminal offense and fined him 51,000 UAH. The citizen registered a legal entity in order to cover up illegal activities.

The Financial Investigation Department of the Main Office of the Ministry of Income in Transcarpathian region, during the preliminary investigation, found out that the citizen, in order to import to Ukraine consumer goods under lowered invoice value, in 2012, had founded a company that was registered to a "strawman".

– At first glance, fictitious companies are virtually indistinguishable from legitimate businesses, but often they are registered using the identity of poor, elderly or unemployed people, – Mykhailo Shukost, the Acting Deputy Chief – the Chief of the Financial Investigation Department of the Main Office of the Ministry of Income in Transcarpathian region said, and added that the illegal activities of this company without book keeping and tax accounting, caused the country damage in amount of more than 2 million hryvnias, in the form of tax evasion by companies that benefited so called services of the fraudulent entity.

– By the way, this is the fourth criminal proceeding that has been forwarded to the court by the staff of the financial investigation department this year and in which the judgment has been delivered for the commission of offenses under Art. 205 of the Criminal Code of Ukraine, – Mykhailo Shukost said.