A rare dive into the workings of tax fraud thanks to a USB key: the “Dubai Papers” trial opens in Paris

A financial trial of a singular scale opens this Monday, and we owe it to a simple USB key, handed over anonymously to the National Financial Prosecutor's Office (PNF) in January 2019. On it, thousands of internal documents from a "large-scale tax fraud and money laundering office", as the PNF describes it. It offered rich taxpayers turnkey solutions to hide and recover their money under the radar of the tax authorities.

At the heart of this organization, the Swiss company Jawer relocated to the United Arab Emirates from 2007 to circumvent the lifting of Swiss banking secrecy, and operated from the free zone of Ras el-Khaïmah, an emirate north of Dubai, under the name Helin. Hence the name “Dubai Papers” given to the trial, which will be held at the Paris Criminal Court from November 2 to December 3.

Thirteen people and three companies are on trial for complicity in tax fraud, organized gang money laundering and criminal conspiracy. They would have allowed more than a hundred wealthy French taxpayers to escape at least 54 million euros in taxes between 2007 and 2018. Other procedures are underway in Belgium and Switzerland.

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For French tax residents alone, the prosecution estimates that Jawer/Helin managed more than 200 million euros in assets, hidden via 658 offshore companies, on behalf of 322 taxpayers. The funds were scattered in banks across the planet, from the Bahamas to Mauritius, from Hong Kong to Puerto Rico.

The pharmacy also offered companies the opportunity to artificially reduce their tax base by sending them fictitious or overvalued invoices for fees or subcontracting. It then allowed them to recover through indirect channels the sums taken out of their accounts.

The mass of messages and financial documents on the USB key makes this “Dubai Papers” affair an unusual dive into the underbelly of the international tax fraud industry, opaque by nature. It shows exchanges with customers via encrypted messaging, money discreetly given to taxpayers via suitcases of notes or prepaid cards, and even the use of aliases in internal communications.

Among its code names, “A3” designated the Belgian prince Henri de Croÿ, at the head of the compartmentalized structure distributed between several countries. It is his social networks in the European aristocracy, his expertise in international taxation and the functioning of justice - due to previous legal disputes in Belgium - which "help to largely explain the extent and sustainability of this fraud", according to the PNF.

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Machine-translated from French