Novi Sad: four arrested for VAT fraud and laundering

The Anti-Corruption Service of Serbia’s Interior Ministry, together with the Tax Police Sector, arrested four people on suspicion of tax fraud and money laundering. The arrests were carried out on orders from the special anti-corruption unit of the Higher Public Prosecutor’s Office in Novi Sad.

Those detained are V. N. from Novi Sad, N. K. and B. T. from Belgrade, and N. K. from Trstenik. According to the investigation, the suspects operated through a construction company whose responsible officer was V. N. Prosecutors say he was the one who filed tax returns containing false data.

Investigators suspect that a system of fictitious invoices generated unlawful gains of about 42 million dinars. Fictitious invoices are documents that accompany business transactions that never actually took place, but serve to show false costs and reduce tax liabilities. In this way, the calculated value-added tax was allegedly lowered.

What exactly are the suspects charged with?

V. N., as the company’s responsible officer, is charged with tax fraud and money laundering. The other three suspects are charged with the criminal offence of money laundering. These are linked offences: first tax is evaded, and then the money obtained that way is pushed through further transactions to conceal its origin.

Tax fraud and money laundering carry high statutory penalties, especially when the value of the unlawful gain runs into tens of millions of dinars. In such cases, prosecutors usually request a detention measure, followed by a motion for custody and further pre-trial proceedings.

It should be stressed that the guilt of none of the suspects has been established by a final court ruling. At this stage, these are suspicions held by prosecutors and police, and the final decision on responsibility will be made by a court based on the evidence presented.

Why are construction firms often the setting for such cases?

The construction sector has been a focus of the tax police for years because of its large cash flow and complex chains of subcontractors. The sheer number of invoices, materials and services makes it hard to track every item, so fictitious invoices slip through more easily. That is why VAT fraud investigations often begin with one company’s paperwork and then expand to related legal entities and individuals.

In this case, investigators reportedly followed the money trail and paper documentation to link all the participants. The arrest of four people from three different cities suggests this was not an isolated episode but an organised business arrangement.

The next steps depend on decisions by the prosecution and the court. Under standard procedure, the suspects will be questioned, and a court will rule on possible custody and further measures.

In your view, how much easier is it to uncover schemes like this when an investigation starts from one company’s paperwork?