Fraudsters sentenced to jail fled by the time the Szolnok Court notified the police

A defendant in a high-value tax fraud case was ordered to be put under house arrest, but the court failed to notify the relevant police station about this decision for an entire week. The court mailed the documents to the police a day after Atlatszo asked why the person in question was still walking free in Budapest. In the meantime, two other defendants in the same case fled. The court issued arrest warrants for them.

Six people were found guilty and sentenced to prison for value-added tax fraud. By using the so-called carousel fraud method, they avoided paying more than 2 billion Hungarian forints in taxes (approximately 6.2 million euros at today’s exchange rate). The six defendants were involved in the dairy product business and abused EU regulations on cross-border commerce to avoid paying VAT.

The scheme involves misusing an EU regulation which allows a company to import goods from another member country without paying VAT. By reselling the goods domestically multiple times and claiming VAT refunds from the government, the scheme’s operators can defraud tax authorities.

It was András Horváth, a whistleblower formerly working for the Hungarian tax authority who raised awareness of the issue in Hungary.

Faces of Victims of Corruption: No regrets – András Horváth

Andras Horvath’s living room is overstuffed with randomly piled papers and other clutter. But anyone who knows his story will key in immediately to just one item: the green folder next to the sofa. Could that be the one?

The six defendants were sentenced in the Szolnok Court on November 27. The first and second defendants were each sentenced to 9 years in jail. The third defendant was sentenced to 7 years, the fourth, fifth and the sixth defendants were sentenced to 6 years in jail. All of them were owners and managers of businesses involved in the VAT fraud.

This was the decision at first instance, thus this decision is not binding. However, the first and second defendants were put in pre-trial detention after the ruling was announced, and the four other defendants were ordered to be put under house arrest.

We started to look into the case when a reader informed Atlatszo at the beginning of December that the fifth defendant is still walking free in Budapest.

We wanted to know how this happened, so we asked the Szolnok Court in an email on December 3. The court said that the fifth defendant can only leave the Budapest district where he lives with a permission from authorities. He also needs to report to the nearest police station every week.

The fifth defendant lives in the 13th district of Budapest. The local police station told us on December 7 that they still have not received any documents about the case from the Szolnok Court and had not been notified about what their task is in relation to the fifth defendant.

Then we asked the Szolnok Court again why they did not forward all relevant documents to the 13th district police in Budapest. The court replied that they did so, on December 4. They also added that the fifth defendant was not present when the court’s decision was announced about his sentence and his house arrest. This means that the defendant needs to be notified in writing, via the postal service, but – according to the Szolnok Court – writing the notification ’takes time.’

Note that the document was sent to the fifth defendant a day after Atlatszo emailed the court, asking about why the fifth defendant is walking free when he is supposed to be under house arrest.

The Szolnok Court also said that the defendant needs to comply with the ruling from the moment that the document about the court’s decision was delivered to him or her. This did not happen until December 7.

Five days later the 13th district police informed Atlatszo that it received the Szolnok Court’s decision my mail.

We asked the Curia, Hungary’s supreme court about the proper procedures. Deputy president of the Curia István Kónya told Atlatszo that in case a court decides that a defendant’s freedom of movement needs to be restricted, the relevant police station needs to be immediately notified, which might be done electronically or via fax.

We also told Kónya that the fifth defendant, according to our source, was publicly boasting about ’not having been notified’ about his house arrest because he was not present at court during the sentencing.

According to Kónya, it is not the defendant that needs to be notified but the police station. The police need to carry the court order into effect, notify the defendant and make sure he or she abides by the court order.

The Szolnok Court did not immediately notify the 13th district police. By the time they did so, two other defendants in the case had fled.

According to the list of wanted people on police.hu, the Szolnok District court issued an arrest warrant for 59-year-old Tibor K. and 46-year-old Ádám P.

The arrest warrants were posted on December 4, the day the court notified the relevant police station about the house arrest of the fifth defendant.

Written by Brigitta Csikász

English version by Anita Kőműves. You can read the original, Hungarian language story here.

Cover photo: the Szolnok Court. Source: birosag.hu