Several GRA officers arrested as police probe multimillion-dollar car tax racket

Several staff members, including two senior customs officers of the Guyana Revenue Authority (GRA), were, up to late Tuesday evening, being questioned as the Criminal Investigations Department (CID) intensified its probe into an alleged car tax racket.

The staff members are from the Customs and Licensing Departments, who were allegedly implicated in the scam involving one of Guyana’s top auto sales operations along the East Coast of Demerara (ECD) and in Georgetown.

It was reported in sections of the media that the car dealership allegedly colluded with a group of customs officers to submit false declarations regarding engine capacity and year of manufacture for several imported vehicles, resulting in the revenue authority being defrauded of hundreds of millions of dollars in taxes.

Investigators also suspect that, in some instances, the declared value of the vehicles was deliberately understated to qualify for lower tax rates. Several imported luxury vehicles are currently under close scrutiny.

In addition, earlier this year, the auto dealer reportedly paid more than $220 million to the GRA in connection with declarations that were allegedly false.

This comes on the heels of several reports emanating from Canada about the alleged tax-evasion racket, where individuals claimed they had the necessary connections to import high-end vehicles without paying the full amount.

United States-indicted businessman Azruddin Mohamed is one of the persons who was under investigation for undervaluing a luxury vehicle.

In 2020, he had imported a Lamborghini and declared the cost of the vehicle as US$75,300, a value which was used by officials to calculate taxes. However, the GRA later received evidence from the US to show that the vehicle actually cost US$695,000.

He was subsequently charged in May this year for making a false declaration to the Revenue Authority, contrary to Section 217(1)(a) of the Customs Act, Chapter 82:01, and knowingly being concerned in fraudulent evasion, contrary to Section 218(e) of the same Act. However, the Director of Public Prosecutions (DPP) had discontinued charges to facilitate an extradition request from the US.

Conspiring to defraud US & Guyana Govts

Azruddin Mohamed and his father, Nazar Mohamed, are accused of conspiring to defraud the US and Guyanese Governments between 2017 and June 11, 2024. The father-son duo is accused of using a scheme to unlawfully obtain property by transmitting communications via interstate and foreign commerce in violation of US laws. According to the prosecutors, the goal was to enrich themselves and defraud the Government of Guyana by evading taxes and royalties on gold exports. They allegedly reused Guyana customs declarations and official seals on multiple shipments to make it appear that taxes and royalties had been paid when they had not.

The indictment stated that Mohamed’s Enterprise would pay taxes and receive official Guyana Revenue Authority (GRA) and Guyana Gold Board (GGB) seals for one shipment, then reuse those same seals and documents on subsequent, untaxed shipments.

The indictment further alleges that the Mohameds arranged for empty wooden boxes bearing intact GRA and GGB seals to be shipped from gold buyers in Dubai to Miami and then sent to Guyana. These boxes were then used to export gold while falsely appearing to have cleared customs and tax obligations. US authorities allege the scheme resulted in more than US$50 million in lost taxes and royalties to the Government of Guyana.

Additional indictments detail similar conduct involving shipments of gold, emails allegedly from Nazar Mohamed requesting the sealed boxes from Miami, and exports of over 165 kilograms (kg) of gold per shipment destined for Dubai. Charges six to nine focus on mail fraud, referencing the shipment of sealed empty boxes from Dubai to Miami, while charge 10 addresses money laundering, which alleges that the Mohameds knowingly transferred funds within the US with the intent to promote unlawful activity. The other charge has to do with Azruddin Mohamed purchasing and importing a Lamborghini sports car to Guyana in 2020. The indictment states that he directed someone to purchase the car for US$680,000, then falsify the invoice to state a value of US$75,300 to understate import taxes.

The sanctioned businessman, who is also the leader of the We Invest in Nationhood (WIN) party, is presently before the local courts in relation to the importation of the sports vehicle and, more so, for evading more than $380 million in taxes in violation of Section 217 of the Customs Act. He has also been charged with fraudulent declaration under the same act.

Forfeiture of certain assets

The US Government is seeking forfeiture of certain assets connected to the accused. If convicted, most charges carry a maximum sentence of 20 years in prison and fines of up to US$250,000, while the money laundering charge carries a fine of US$500,000 or the value of the laundered property.

The indictment follows sanctions imposed over a year ago by the US Government on the Mohameds, their businesses, and Permanent Secretary (PS) Mae Thomas in relation to the same allegations. The sanctions are related to the evasion of taxes on gold exports, with OFAC noting that between 2019 and 2023, Mohamed’s Enterprise omitted more than 10,000 kg of gold from import and export declarations and avoided paying more than US$50 million in duty taxes to the Government of Guyana. Since the imposition of the sanctions, the Guyana Government had suspended the licences of the Mohameds’ various businesses, highlighting that the US-sanctioned businessman is a risk and a threat to Guyana’s financial stability, sovereignty, and diplomacy. Subsequently, several Government entities and local businesses, including commercial banks, have cut ties with the Mohameds.