Major fraud network in Tashkent exposed: Officials and entrepreneurs involved

A criminal network consisting of 38 individuals, including 17 tax officials, a customs officer, a bank employee, a deputy district governor, and executives from 18 business entities, has been dismantled in Tashkent. This was reported by Uzbekistan’s State Security Service.

The group allegedly set up eight fake companies between 2020 and 2023 to fraudulently claim refunds for value-added tax (VAT) on furniture products falsely reported as exported. By exploiting the 15% VAT refund scheme, they embezzled a total of 24.58 billion soums (approximately $2.1 million) from the state budget.

The operation was reportedly coordinated by a former tax department employee who unofficially led the scheme. Although these companies were registered in Yangiqo‘rg‘on district of Namangan region, their legal addresses were frequently changed, and non-affiliated individuals were listed as formal leaders. While these entities were described as furniture manufacturers, no actual production activities were carried out.

Fabricated records claimed that the manufactured goods were exported to Kyrgyzstan. However, investigations revealed that no export operations had taken place, and the companies' stamps and contracts had been falsified by the group. The group unlawfully reclaimed VAT funds from the state budget using these fake documents.

Criminal proceedings were initiated under multiple articles of Uzbekistan’s Criminal Code, including:

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• Article 167 (embezzlement or misappropriation of property),
• Article 179 (false entrepreneurship),
• Article 184 (tax evasion),
• Article 209 (abuse of power), and
• Article 228 (forgery of documents, stamps, or seals).

During the investigation, 6.8 billion soums were recovered for the state. Additionally, 6.3 billion soums worth of assets, including a multi-story private medical clinic, a car wash facility, two apartments, six vehicles, and various electronic devices, were confiscated to compensate for the damages.

Following the investigation, Mirzo Ulugbek District Criminal Court sentenced 14 individuals to prison terms ranging from 5 years and 6 months to 7 years and 6 months. Eighteen others received probationary sentences with a three-year trial period, requiring them to repay the financial damages within two years. Six individuals received sentences of restricted liberty for terms exceeding two years.

Earlier, another criminal group in Tashkent region was arrested for producing counterfeit currency, including 28.3 million soums worth of fake 100,000-soum notes.