Saturday 24 October 2009

100b yuan fake-invoice ring smashed in Guangzhou

Police in Guangzhou said they had smashed a network that produced and distributed fake invoices with a face value of about 100 billion yuan (HK$113.7 billion).

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Guanyu said...

100b yuan fake-invoice ring smashed in Guangzhou

Ivan Zhai
20 October 2009

Police in Guangzhou said they had smashed a network that produced and distributed fake invoices with a face value of about 100 billion yuan (HK$113.7 billion).

A statement released by police in the city’s Tianhe district at the weekend said the network, which had produced more than 2.3 million fake invoices, was established and controlled by a family in Linhai, Zhejiang. One of the heads of the gang had been a tax official in the Linhai city government, the Guangzhou-based New Express newspaper reported yesterday.

Confessions by network salesmen caught in April had led police to detain 31 people, smash 13 workshops and seize 28 printing machines and computers, and more than 1,200 counterfeit official seals by the end of June, the report said.

It was the second time in two months that mainland police had raided a huge fake-invoice operation. Police in Kunming, the capital of Yunnan, said early last month that they had smashed a fake-invoice workshop and seized about 400,000 fake invoices with a combined face value of more than 300 billion yuan. Although the fake invoices found in Kunming were for services only within the province, those found in Guangzhou were for the Zhejiang family’s sales network, which had expanded to 19 provinces, autonomous regions and municipalities.

The campaign against fake invoices has long been a major focus for mainland police. The ringleader in the largest fake-invoice case to date was jailed for 16 years by the People’s Court in Luoping county, Yunnan, in April last year for making fake invoices worth more than 1 trillion yuan. Authorities estimated that those fake invoices would have caused tax losses totalling more than 75 billion yuan.

Even so, one Shanghai-based finance specialist said the campaign against counterfeit invoices was doomed to failure.

He said the fake invoices were the best way for enterprises to get tax deductions, and some officials also used them to embezzle public funds.

“The profit from making fake ‘common’ invoices in the service industries, such as catering, hotels and mass consumption, can be unlimited, while the risk is relatively low compared with making fake value-added invoices” for manufactured products, he said. “It will never be wiped out completely.”

One Shenzhen-based salesman, who contacted this reporter through a spam e-mail offering to sell fake invoices, said he would charge 2,500 yuan for fake hotel invoices, each with a face value of up to 99,999 yuan.

“It is the lowest price I can offer you, no matter how many copies you want,” he said when reached by telephone.

He gave only a surname, Zhang, but there was no way to confirm whether that, too, was fake.