Potentially record-breaking illicit earnings stash uncovered by Tax Fraud Investigation Unit: more than 3.5 m euros had been hoarded
Tax Fraud Investigation Unit employees of the federal province of Salzburg made an incredible discovery when searching the premises of the operators of a large après-ski establishment. They seized cash and savings books containing illicit earnings worth more than 3.5 million euros. As if that were not enough, an illegal firearm belonging to the bar owner was also found.
The Tax Fraud Investigation Unit, on the basis of its investigations, had long harboured the suspicion that this après-ski bar was raking in undeclared earnings. The investigations culminated in searches of the premises of the family operating the establishment, in September 2019. The suspicions became concrete in a very short space of time. In addition to finding an unregistered illegal handgun in a jacket hanging in the bar owner’s wardrobe, EUR 34,500 in cash was found in the jacket pockets. The defendant sought to laugh this away by saying it was simply his "pocket money".
But further searches revealed an almost unbelievable scale of suspected tax evasion. In the safe and in various bags on the premises, cash totalling more than 780,000 euros and more than 200 (!) savings books, most of them unnamed, with deposits totalling more than 2.7 million euros were found.
As the defendants could not explain the origin of the money it was therefore suspected that the money came from undeclared earnings from the après-ski establishment. And there were particular grounds for suspecting this, as the inspection of the savings books showed that on just one day in the high season up to three unnamed savings accounts were opened, with deposits of just under 15,000 euros in each; and these transactions were not recorded in the bar/restaurant’s business records.
Reacting to the pressure from the ongoing investigation, just a few days after the search the defendants paid one million euros to the tax office as a “prepayment” for the anticipated additional tax claim. It is also remarkable that since the bar/restaurant was searched, the monthly income declared has been roughly twice that of comparable periods prior to the search. The defendants themselves have already made a full confession.
At the same time as the tax fraud investigations were ongoing, the tax office started a tax audit. The meticulously conducted tax audit by the St. Johann-Tamsweg-Zell am See office of the Tax Authority Austria, supported by the tax fraud investigation, led to a demand for additional taxes of EUR 3,255,158. The defendants have already paid the greater part of this demand. Now it is the turn of the public prosecutor’s office (Staatsanwaltschaft) for the federal province of Salzburg to investigate, as the owners of the bar/restaurant will also have to answer to the Regional Court in Salzburg. These proceedings could lead to a fine running into millions of euros; and several years’ imprisonment is also possible.
“The amount of illicit earnings uncovered in this case surprised even the most experienced investigators,” commented Minister of Finance Gernot Blümel, who went on to say: “Tax fraud distorts competition and harms both the economy and every individual who has to pay higher taxes as a result. My thanks go to the Tax Fraud Investigation Unit and the tax office for their meticulous investigative work and for successfully concluding this unparalleled case.”