Joint investigation team constituted to probe into fake bank accounts

KARACHI: Government constituted a joint investigation team to probe into the fake bank accounts, carrying multibillion rupees of transactions and frequently used to receive bogus sales tax refunds, officials said on Wednesday.

The officials in the Federal Board of Revenue (FBR) said the team comprises of representatives from the FBR, Federal Investigation Agency (FIA) and Financial Monitoring Unit.  The team started a probe into a complaint that bank accounts were opened on the name of a complainant without his knowledge and the amount deposited in such accounts was around Rs1.2 billion.

The complainant, who is a poultry dealer, has never opened an account in any of the banks. When he approached to a bank to open an account after strict regulations imposed by various regulators, he was told that two to three accounts in Bohra Bazar, Karachi had already been operational on his name since 2008.

The person registered a complaint with the FIA against the fake bank accounts and transactions on a suspicion that the amount would be used for terrorism or tax evasion.

The preliminary investigation of the FIA revealed that bogus accounts were used to evade a huge amount of taxes. The FIA lodged a first information report (FIR) and nominated two accused, who were operating the bogus accounts. Besides, the bank officials were also nominated in the case for facilitating the illegal activates.

The FIA also sought help from the FBR and FMU as the case was pertaining to tax evasion and local money laundering. Sources in Regional Tax Office – II (RTO-II), Karachi said the office had nominated Wazir Ahmed Khushik, Assistant Commissioner Inland Revenue for the joint investigation team and to probe into the tax affairs of two accused nominated in the case under the Income Tax Ordinance 2001, Sales Tax Act 1990 and Federal Excise Act 2005.

FBR sources said in the past several bogus bank accounts were opened to defraud the national exchequer by availing sales tax refunds. An official at the RTO-II Karachi said the office launched massive campaign against sales tax refund frauds and unearthed around Rs40 billion worth of scam back in 2012.

The official said thousands of companies registered on fake documents were either suspended or black listed for sales tax transactions. The official said most of the bogus companies, established between 2008 and 2011, were making transactions on the basis of fake and flying invoices in order to fraudulently receive sales tax refunds.

The official said a person is required to have a bank account to receive the cheques of sales tax refunds. “Since the sales tax is obtained on bogus transactions people also maintain bogus bank accounts,” the official said.