THE carbon tax will be a “honeypot” for criminals and a massive fraud opportunity that could be manipulated by the mafia to make and launder money, a major fraud conference was warned yesterday.
At the International Organised Fraud Symposium in Queensland this week, Australian Crime Commission executive David Lacey said crime groups, including the Italian Mafia, were already exploiting Europe’s environmental schemes – and pocketing huge tax proceeds. Terrorists and organised crime groups, including violent Mexican drug cartels, also used fraud to bankroll their activities, Dr Lacey said.
“Organised criminals will look for anything that can provide them with illicit gains. Any large (investment) program, where there’s points of leverage for criminalities to make profit, requires attention,” he told the International Organised Fraud Symposium in Queensland, attended by some of the world’s leading scam-busters.
Professor Drew was concerned “mum and dad” investors could be lured into dodgy trading schemes because they are seen as environmentally friendly. “I’m very, very concerned that we are actually setting up another kind of Ponzi-like scheme”, Professor Drew said.
Read more from the Telegraph article”Carbon schemes a Mafia ‘honeypot’ here. http://www.dailytelegraph.com.au/news/national/carbon-schemes-a-mafia-honeypot/story-e6freuzr-1226150401409
This first decade of the new century will forever be known as the decade of “Fraud and Ponzi Schemes”.
When EU officials established the Emissions Trading Scheme in 2005 to help meet emission reduction requirements under the Kyoto Protocol, tax fraud was the furthest thing from their minds.
In an EU-wide investigation, Germany has carried out the biggest swoop on suspects, with prosecutors identifying around 170 suspects in carbon fraud. Six people accused of evading more than 200 million euros ($282 million) in tax in the European carbon market, while in the UK, seven defendants have been charged over suspected VAT fraud in the carbon market. Reuters reported that a spokeswoman for HM Revenue and Customs said a plea and case management hearing is scheduled for October 31.
The European police agency Europol reported that the European Union’s Emissions Trading Scheme (EU ETS) had fallen victim to fraudulent trading activities over the past 18 months, worth €5 billion for several national tax revenues. It estimates that in some countries, up to 90% of the whole market volume was caused by fraudulent activities.”Carbon trading fraud is nothing new: In 2009, Europol, the European Union’s law enforcement arm against organized crime, announced that carbon-trading fraud has cost the bloc’s governments $7.4 billion in lost tax revenue over the last 18 months.
Also in 2009, the biggest clean energy auditor in the world, SGS UK, had its accreditation suspended by UN inspectors because it did not properly audit projects in carbon trading markets. DNV, a Norwegian auditor, was also accused of similar infractions. From 2008 to 2010 in the European Union, fraud within the carbon trading community is estimated to have cost taxpayers more than $7 billion. Government authorities have launched investigations across Europe, conducting raids in the UK, Germany, Spain, Norway, Denmark, Belgium, Finland, Netherlands, Portugal, Czech Republic and Cyprus. By May 2010, 62 people had been arrested for carbon-trading fraud.
SIX business executives went on trial in Frankfurt in August 2011, accused of illegally claiming hundreds of millions of euros in tax refunds in a scheme linked to carbon emissions trading.
The alleged racket targeted the European Union Emission Trading Scheme, the largest multi-national, greenhouse gas emissions trading scheme in the world, with about 12,000 companies on the exchange.
In one of Germany’s biggest fraud cases the defendants from Britain, France and Germany are suspected of cooking up an international system to cheat tax authorities out of more than €230 million ($318.23m). The trial, in which more than 300 witnesses are due to testify, is expected to run until March 2012.
Authorities have launched a probe against another 160 suspects in the case, including alleged accomplices in the United Arab Emirates, Britain and Switzerland, and believe the total volume of the fraud to be about €850m ($1.18 billion).
Source: AFP, 16 August 2011.
