6 face charges in Hanoi’s massive alcohol tax fraud

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Prosecutors in Hanoi have issued charges against six people involved in an organized tax evasion scheme in which lower-taxed alcohol products meant for export were secretly sold to local buyers for huge profits.
The fraud, which lasted more than three years, is believed to have caused the government to lose over VND13 billion (US$600,000), Tuoi Tre (Youth) newspaper reported on Thursday, citing an official source.
Ho Van Hai, 59, former director of Hanoi Liquor Company (Halico), and Nguyen Thi Kim Hanh, 42, a dismissed customs officer, faced “power abuse” charges. The others were charged with “tax evasion.”
Prosecutors said in November 2008, Halico contracted its retailer Hoang Lan Company to export its products to Laos as per request by Hoang Van Xuong, 44, and his wife Dinh Thi Minh Hoa, 41, both directors of Hoang Lan.

Ho Van Hai (in white jacket), former chief of Vietnam’s top vodka producer Halico, being arrested in Hanoi last year. File photo.
As of February 2012, Halico had sold more than 100,000 barrels of vodka worth over VND46.7 billion ($2.16 million), excluding value-added taxes, to the retailer for export.
Xuong and Hoa, however, sold nearly half of them locally to earn profits.
In Vietnam, exported alcoholic beverages is exempted from luxury tax, which ranges from 25-50 percent.
Without this tax, they are cheaper than locally-consumed products.
According to the indictment, Xuong and his wife faked export documents with the help of Hanh, the customs officer, and Nguyen Thi Thuy, 38, an employee with Agribank.
The married couple allegedly used the same scheme to also sold more than 22,000 packages of beer cans that they bought from Habeco, another big beverage company in the capital city, between 2010 and 2012.
Another Halico employee, whose role in the fraud has not been revealed, was also charged with tax evasion. 

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