Tax pyramid. Head of Tyva Republic implicated in multimillion fraud with budget funds?
A scandal involving a married couple of high-ranked officials is escalating in the Tyva Republic. The Head of the Regional Office of the Federal Tax Service (FTS) in the Tyva Republic and her husband, Plenipotentiary Envoy of the Head of the Tyva Republic, were initially charged with fraud and swindling and later – with money laundering. Using the funds embezzled from taxpayers, the spouses have purchased two apartments in Moscow for their daughter and niece. But residents of the republic believe that this is just the tip of the iceberg. The FTS Regional Office in the Tyva Republic had operated for years as a clan-based organized criminal group under the ‘patronage’ of the regional leadership. Would the investigators indict the niece and brother of the Head of the Tyva Republic? And would Sholban Kara-ool be able to retain his chair?
On January 18, 2019, the Investigations Directorate in the Tyva Republic of the Investigative Committee of the Russian Federation (ICR) has announced the institution of the third criminal case against the Head of the FTS Regional Office in the Tyva Republic and her husband. The family couple are suspected of legalization of criminal proceeds. They have been charged under paragraphs "a" and "b" of part 4 of Article 174.1 of the Criminal Code of the Russian Federation (legalization (laundering) of monetary funds or other property acquired by a person as a result of an offense committed by an organized group on an especially large scale).
Veronika Suge-Maadyr, Head of the FTS Regional Office in the Tyva Republic, has been holding her post since 2012. Prior to this appointment, the female official was in charge of the FTS Inter-District Inspectorate № 1 in the Tyva Republic. Her husband also was a high-ranked official until recently. Anatoly Suge-Maadyr used to be the Plenipotentiary Envoy of the Head of the Tyva Republic to the Kaa-Khem District (Kozhuun). He has voluntarily resigned after being criminally charged together with his wife.
Veronika Suge-Maadyr, Head of the FTS Regional Office in the Tyva Republic
In November 2018, the ICR has announced the institution of two criminal cases against the family couple of officials under part 2 of Article 292 (official forgery entailing an essential violation of the rights and legitimate interests of citizens or organizations) and part 4 of Article 159 (swindling committed by an organized group on an especially large scale). Prior to the arrest of the suspects, their offices and residence have been searched by the police and Federal Security Service (FSB) of the Russian Federation. The Kyzyl City Court has remanded spouses Suge-Maadyr in custody until April 2019.
According to the investigation, the married couple of high-ranked officials “and other officers of the republican tax authority” had created a stable criminal group where each member had a specific role. Using their official capacity, the group members have embezzled funds received from a local company and supposed to be remitted to the federal budget. Vostok (East) Limited Liability Company has paid value-added tax for the 3rd quarter of 2017 in the amount of 31.17 million rubles ($472.5 thousand), and the funds were fraudulently transferred to Dobrostroy-Remont Limited Liability Company. Later, in order to put a varnish of legality on the criminal proceeds, the Head of the FTS Regional Office in the Tyva Republic and her husband have transferred the money to dummy companies under fictitious agreements of purchase and sale.
Anatoly Suge-Maadyr, husband of the Head of the FTS Regional Office and ex-Plenipotentiary Envoy of the Head of the Tyva Republic to the Kaa-Khem District
Using a portion of the embezzled funds, spouses Suge-Maadyr have purchased two properties in the Russian capital for their relatives: an apartment in a building under construction worth 5 million rubles ($75.8 thousand) for their daughter and in her name and nonresidential premises worth 8 million rubles ($121.3 thousand) for their niece. The premises have been re-zoned into residential housing and titled in the niece’s name. Following a motion brought by the investigation, the both properties have been seized – as well as other assets belonging to the spouses.
The CrimeRussia source in the republican law enforcement structures provided some details not mentioned in official reports of the ICR. In the framework of the criminal case against spouses Suge-Maadyr, the investigators have also detained Shoraana Dongak, Senior Specialist of the Logistics Department of the FTS Regional Office in the Tyva Republic and Head of the FTS Inter-District Inspectorate № 1. She already started collaborating with the investigation and currently makes statements.
According to the source, Dobrostroy-Remont Limited Liability Company – the recipient of the stolen funds – was established by Anatoly Suge-Maadyr, while Sergei Uyusov, owner and Director of Vostok Limited Liability Company, was aware, to say the least, of the machinations. The investigation established that Eres Duuza, Director of Dobrostroy-Remont, has notified Uyusov in writing about the value-added tax overpayment in the amount of 31 million rubles ($470 thousand) and offered this sum for the mutual settlement with Vostok. Uyusov is a witness in this case so far; he refuses to apply for the victim status. The businessman is not considered a suspect because the request to refund the overpaid value-added tax was forged by tax service officials.
The investigators suspect that the criminal community created by spouses Suge-Maadyr had operated for at least three years and embezzled much more than 31 million rubles ($470 thousand). The damages can amount to hundreds of millions of rubles – but the evidential base for other episode is not gathered yet.
If the operatives manage to prove that, in addition to Vostok Limited Liability Company, two more enterprises were involved into the criminal scheme – Tuvinskaya Gornorudnaya Companiya (Tyva Mining Company) Limited Liability Company and Mezhegeiugol Limited Liability Company – the total amount of embezzled funds may exceed 100 million rubles ($1.5 million).
The criminal case against spouses Suge-Maadyr is broadly discussed in the region because both high-ranked officials are members of the ‘close circle’ of Sholban Kara-ool, Head of the Tyva Republic. After the arrest of his trusted envoy, many experts have concluded that this is the beginning of an attack against Kara-ool himself with the purpose to remove him from office. The Presidential Executive Office of the Russian Federation has been steadily replacing heads of enforcement structures in Tyva, including the republican Prosecutor, Minister of Internal Affairs, Chief Investigator, and Head of the Regional Administration of the Federal Penitentiary Service. Moscow Post newspaper reports, citing its source, that Anatoly Suge-Maadyr is ready to testify against the head of the republic.
Sholban Kara-ool, Head of the Tyva Republic
However, Tyva residents doubt that the former envoy dares to confront omnipotent Kara-ool who has been in charge of the republic since 2007 and, despite his low ratings, was never ‘blacklisted’. Furthermore, members of the Suge-Maadyr family not only owe the ‘high patron’ a debt for their privileged status – but, most probably, have built the criminal scheme with his authorization.
According to representatives of the local opposition, Veronika Suge-Maadyr was appointed in charge of the regional tax authority for two traits of her nature – flexibility and agreeableness. When Kara-ool became the Head of Tyva, the chief regional taxman was Dmitry Kastyrin from Moscow. The new republican head decided to check his loyalty and instructed Kastyrin to audit all companies belonging to competitors of his brother, Yuri Kara-ool, and specializing in alcohol sales. But instead of putting pressure on undesired competitors, Kastyrin has audited all vodka suppliers without exceptions, including companies belonging to ‘untouchable’ Yuri, and identified a number of violations there.
Брат Шолбан Кара-оола, Yuri Kara-ool, brother of Sholban Kara-ool
Sholban Kara-ool was outraged with actions of Kastyrin and declared a war against him. The Head of the FTS Regional Office in the Tyva Republic scored several tactical victories – for instance, he established that Yryankhai Meat Factory belonging to Sholban-ool Irgit, then-First Deputy Head of the Tyva Republic, had concealed 114 million rubles ($1.7 million) from taxation. However, Kastyrin lost the main battle: Kara-ool managed to institute a criminal case against him. The uncompromising taxman was transferred to another region, and the Sholban Kara-ool used this opportunity to appoint his creature in charge of the regional tax authority.
His first choice was Valentina Kandan, a friend of Sholban Kara-ool’s wife and former Minister of Finance of the Tyva Republic. However, Kandan turned out to be an obedient – but not too cautious – executor. She fulfilled an instruction given by Kara-ool and reduced the tax arrears of Yryankhai not to the level allowing the First Deputy Head of the Tyva Republic to avoid criminal prosecution – but by thousand times at once. A scandal has broken out – initially in the local press and then at the federal level – and Kara-ool had to get rid of Kandan.
The republican head managed again to appoint to this key post his ‘protege’ – Veronika Suge-Maadyr. Rumors circulate in the republic that, after the high-profile scandal with Kandan, it was difficult to lobby this candidacy – and Kara-ool had to use his ties with a powerful fellow countryman – Sergei Shoigu. But the result was worth the effort: Suge-Maadyr turned out to be an ideal head of the tax authority: obedient and efficient. Not only hadn’t she created any problems for henchmen of Kara-ool – but also taken any effort to please the republican head. For instance, she put Tatiana Kara-ool – niece of Sholban Kara-ool and daughter of his older brother Yuri – in charge of the Tax Inspectorate in the City of Kyzyl, capital of the Tyva Republic. It was difficult for a young and inexperienced girl, who has been working in the tax service for only one year at that time, to cope with the new duties. But Suge-Maadyr did not really care about that and put a blind eye to any faults of Tatiana to strengthen ties with the Kara-ool family.
Upon gaining the support of the republican leadership, Suge-Maadyr has transformed the tax service into a tool for lining her pockets and distributed almost all positions there between her relatives and friends. The local people were even joking that the FTS Regional Office in the Tyva Republic should be renamed into Suge-Maadyr Limited Liability Company – because, in order to get a job in the tax authority, a candidate had to be at least a cousin of a second cousin of Veronika Suge-Maadyr.
The local journalists have compiled a long list of proteges of the new Head of the FTS Regional Office. For instance, Suge-Maadyr has appointed Evgeny Vachelanov, husband of her cousin Ailana Vachelanova, her first deputy. She made her daughter-in-law Urana Khertek the Senior Specialist and Expert at the IT Department. Another daughter-in-law – Marina Birilei – became an Inspector at the Taxpayer's Registry and Registration Department. Niece Chinchi Birilei was appointed a Deputy Head of the Arrears Settlement Department. Nephew Agydzhy Kuular became a Senior Specialist at the Informational Support Department. Furthermore, Veronika Suge-Maadyr has put her sister Elina Dagba-Lama in charge of the staffing policy by appointing her a Senior Specialist and Expert at the General Support Department. The list of her relatives employed with the FTS Regional Office for the Tyva Republic can be continued further and supplemented with friends, fellow countrymen, and their relatives and friends.
Very few people having no family or friendly ties with the Head of the FTS Regional Office currently remain in the republican tax authority.
The ‘patronage’ of Kara-ool and loyalty of subordinated enabled Suge-Maadyr to act brazenly and nearly openly – without fear of exposure. Tyva residents are wondering why the investigators have charged her with only one episode yet – they believe that the number of such episodes amounts to several dozens. The Head of the FTS Regional Office was making money even on her relatives: she had issued them huge bonuses that later were repaid to the benefactress. Veronika Suge-Maadyr had also paid great attention to the flourishing of her husband’s business. For instance, she helped Anatoly Suge-Maadyr to make profitable cargo transportation contracts with major Chinese company Lunsin. He husband hadn’t even performed any works: he just retained subcontractors and paid them much less than had received from the Chinese customer. Lunsin had also benefited from their collaboration by receiving value-added tax refunds amounting to hundreds of millions of rubles without any issues.
The spouses had reportedly used in their machinations not only Dobrostroy-Remont Limited Liability Company founded personally by Anatoly Suge-Maadyr – but at least, two more enterprises officially not affiliated with him. The engaged parents had cared not only about themselves – the daughter of the Head of the FTS Regional Office and Plenipotentiary Envoy of the Head of the Tyva Republic is studying in the prestigious Financial University Under the Government of the Russian Federation in Moscow. Life is pretty expensive in the Russian capital, and the girl needs a place to live there. Therefore, it was decided to purchase an apartment for the young student not far from the university – in the Khoroshevsky district of Moscow.
Veronika Suge-Maadyr hadn’t expected the years of impunity to end and law enforcement operatives to come to the tax authority with searches. When this happened, she has immediately addressed the ‘high patrons’ for assistance. According to the opposition, after the meeting with the Head of the FTS Regional Office, Sholban Kara-ool has visited Vladimir Shchurovsky, Head of the FSB Directorate for the Tyva Republic, and attempted to persuade him to cease the investigation. But, apparently, he failed to effect the desired result.
The case has escalated to the federal level – so, the Head of Tyva hastily started off for Moscow. It is unknown what people had he met there. The negotiations likely failed because, on the next day after the return of Sholban Kara-ool to the republic, his Plenipotentiary Envoy Anatoly Suge-Maadyr was arrested. The situation began spiraling, and Ayas Chydaan-ool, Deputy Prime Minister of the Tyva Republic and former Deputy Head of the Investigations Directorate in the Tomsk Region of the ICR, has departed to the capital. Later, Kara-ool made another trip to Moscow – but again in vain.
Why is the Head of Tyva defending his proteges so fiercely? There is a saying in the republican government: “God granted Kara-ool the ability to do nothing for free”.
The republican head wouldn’t care so much about the fate of spouses Suge-Maadyr if Yuri Kara-ool, his daughter Tatiana, and potentially Sholban Kara-ool himself were not implicated in that case. Therefore, the arrest of the Head of the FTS Regional Office and her husband – Kara-ool’s Plenipotentiary Envoy – may manifest the long-awaited change of power in the republic.
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