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NBI wraps up probe of construction firms' suspected €4.6m in tax evasion

"This is probably the biggest case [of off-the-books employment] in the past decade," the National Bureau of Investigation said.

File photo. Image: Jyrki Lyytikkä / Yle

Finland's National Bureau of Investigation (NBI) announced that it has wrapped up an extensive investigation into the activities at two - now-defunct - construction companies which are suspected of major tax evasion and non-payment of pensions.

The NBI's chief investigator in the case, Janne Järvinen, said that when the companies hired around 350 workers, they failed to pay about 4.6 million euros in income taxes and about 1.3 million euros towards the national pension plan.

Järvinen said this case is likely the largest of its kind in the past ten years.

A total of about 20 suspects were involved in the alleged off-the-books employment arrangements, but four main suspects are believed to have played key roles in the schemes. All of the suspects had been held during the investigation but have since been released, according to the NBI.

The four chief suspects include three Finnish nationals and an Estonian, according to Estonian public broadcaster ERR. Authorities believe they committed the crimes between 2013 and 2015, saying that the firms posted annual turnovers of 10 million euros.

The companies involved in the probe were based in the capital region, and both filed for bankruptcy during 2016-2017.

The four are suspected of aggravated tax evasion, aggravated pension fund fraud and aggravated accounting crimes. The NBI also suspects that construction waste materials were illegally transported to Estonia.

The case has now been forwarded to the western Uusimaa prosecutor's office.

NBI: Work carried out at day care centres, schools

According to the NBI a total of 350 workers employed by the firms - mostly Estonian nationals - were identified during tax audits and the preliminary investigation. There are suspicions that more than 300 other individuals, whom authorities have not identified, had also been hired by the firms.

The construction companies were generally hired as sub-contractors to carry out renovation and construction work at day care centres, schools and residential projects.

The firms are suspected of having paid wages to the tune more than six million euros in cash, but Järvinen said unlike other similar cases in the past, not all of their wages were handled off-the-books.

Järvinen said the firms paid some workers with taxes and pension deductions withheld, but he noted those deductions did not go to the proper authorities, adding that some of those funds may have already been taken abroad.

"In such cases it's common for the activity to take place in Finland and the people in charge have a different life elsewhere, like Spain, Turkey or Asia," Järvinen said.

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