Cigarette Trader Charged with 3.3 Million KM Tax Evasion

The Prosecutor’s Office of Bosnia and Herzegovina filed an indictment for organized crime, tax evasion and money laundering against Zenica-based Čago Komerc and Fahrudin Čago, Smail Mujčinović, the company’s owner and director respectively.

They are charged with tax evasion and money laundering in the amount of 3.3 million KM.

The prosecutors also brought charges against another 12 firms which did business with Čago Komerc and 21 natural persons, among whom were the employees of the mentioned companies.

According to the indictment, Čago komerc” purchased cigarettes from tobacco factories in Rovinj and Sarajevo and sold it on without issuing bills of sale between 2006 and 2009. False invoices were made out for these sales and addressed to 12 accused legal entities, with falsely reported approved rebates and reduced sales price of cigarettes, thus reducing the tax base. The cash from these sales was kept in a safe on Čago’s premises.

In this manner the budgets of BiH and FBiH were damaged for a total sum of 3.3 million KM. The payment of value added tax (VAT) was evaded in the amount of 1.6 million KM and another 1.7 million KM in income taxes.

According to the indictment, Čago was the mastermind of a criminal group which was involved in the procurement and distribution of cigarettes. It was well hierarchically organized with clearly designated roles. According to the indictment Čago was the head of the group, while the director Mujčinović worked under his guidance.

The accused employees of the company “Čago komerc”, drafted documentation on fictitious transactions of cigarettes, led internal – hidden cashbooks and detected the accused legal entities to which the obligation to pay VAT was transferred on the basis of fictitious documentation.