The project set off showing how VAT and tax fraud with candy had doubled in Denmark in little over a year. Initially the investigation revealed how strawmen and shelf companies were being used to defraud the Danish Treasury of millions of kroner. The investigation revealed how companies were being set up with false addresses and “directors” that were actually Romanian workers and homeless people who were victims of identity theft. Moving from here the project described how a network of organized criminals orchestrated VAT and tax fraud with different goods. The investigation revealed that directors in companies involved in the fraud were suspects in a large terror case in Spain with links to Islamic. The investigation showed how the companies traded between them to generate false invoices that could be used for the fraud. The project was published as a documentary in three parts, as three online long reads and interactive graphics and as news stories online and in radio and TV.
Originally the idea came by in a brain storm where it was suggested to investigate a similar, but older network based VAT fraud with carbon credits. The carbon fraud peaked in 2009-2010. Basicly the idea was to identify central players in the carbon fraud and see if they were still active and if so, what goods they would be trading in. By filtering a list of carbon traders and running the filtered list through current company registries we were able to identify key points in the current network of companies involved in different kinds of VAT and tax fraud.
The main entry point was a list of carbon traders acquired in a FOIA request in 2010. Using names, addresses, email addresses, phone- and fax numbers from this list we were able to generate current data from primarily Danish company registries (but also Swedish, German registries among others). Data was also collected from the Danish Law Gazette, which publishes data on bankruptcies etc, and from the Danish Veterinary and Food Administration that collects and publishes records on inspections of food traders. On top of this, documents on single companies, bankruptcy cases, court documents etc were collected and identity and location of companies and directors were investigated in the field.
The investigation for the three part documentary and the long reads and interactive graphics took most part of six months, spanning from initial brain storm in the summer of 2015 until publication in January and February 2016. This investigation was performed by a small team of journalists centered around reporters Troels Kingo Larsen and Mads Nilsson for the documentary and Bo Elkjaer for the online part of the publication. For the online part two computer programmers and a graphics designer designed and developed the interactive graphics and the design of long read articles. In the weeks up to the initial publication a team of news reporters were tasked to the case to develop stories from the material for publication on all DR platforms.
– The project for the first time documented direct links between organized financial crime and possible terror funding. This links has often been alleged, but never documented by authorities such as Europol.
– In Denmark the project led to authorities heightening focus on VAT and tax fraud and terror funding.
– The Danish Tax Autority Skat immediately on publication strengthened the effort agains VAT fraud: (http://www.skm.dk/aktuelt/presse/pressemeddelelser/2016/januar/styrket-indsats-mod-momssvindel)
– Police arrested persons suspected of links to the network immediately after episode 1 of the three part documentary.
– Then Minister of justice Søren Pind (V) issued an effort to investigate militant Islamic extremism with the “Al Capone-method” targeting tax evasion, VAT fraud and other kinds of fraud.
– Internationally, revelations were followed up in for example The Netherlands where the Parliament has asked for reports on the fraud.
– The project is being used in the investigation by Spanish authorities and intelligence services in a terror case linked to Syria, Mali and Libya.
The main challenge was locating and confronting people and companies involved in the fraud:
– Companies often were listed at false addresses – an empty lot in Copenhagen held several companies, a temp worker agency had its address in a publicly owned meter cabinet, and companies rented addresses, but never showed up, never paid rent, and used the address until evicted or declared bankrupt
– Stooge directors often were low level foreign employees whose identity had been stolen or e.g. Romanians brought to Denmark to register as directors for a small fee.
– Still, other directors and key figures who were directly involved in the fraud at some level were either arrested in e.g. Spain or Germany or even killed in fighting In Mali
– Authorities weren’t exactly helpful either. As an example the Danish Veterinary and Food Administration halted all media access to employees and inspections.