The Two-Way
1:19 pm
Thu July 14, 2011

Colombia Accuses Tax Workers Of Stealing Millions

Colombian police have made arrests to break up what officials say is a circle of crooks who stole some $568 million from the directorate of taxes and customs, according to the AP.

The newspaper El Tiempo reports that 12 people have been arrested so far, with at least five more still being sought. The core of the group seems to be current and former tax department employees, who falsified documents and created fictitious businesses to justify huge refunds of the country's Value Added Tax.

Investigators say the scheme went on from 2004 to 2009. Estimates of the amount stolen vary widely, with the news outlet Colombia Reports citing early estimates that $4 billion — or 10 percent of the country's annual sales tax receipts — were siphoned off.

Members of the cabal were reportedly living large — the chief of police compared their behavior to that of a large drug gang, according to El Tiempo.

Colombia's President Juan Manuel Santos says that the case strikes at "a little arm of a great octopus" of corruption, the AP reports.

Santos said that investigators became suspicious when the amount of VAT refunds began to triple, and then quadrupled — despite no change in the country's economic activity.

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