CIRA-SP carries out operation against ICMS fraud The Interinstitutional Asset Recovery Committee (CIRA/SP) carries out this Wednesday (15) an operation against an organization investigated for alleged sale of false ICMS credits to unduly reduce the tax owed to the state. The scheme would have withheld R$3.8 billion in tax credits. One of the main nuclei of the investigated group is linked to an economic group linked to lawyer Nelson Wilians, whose office is the target of searches. In Londrina, the target is lawyer Mayra de Paula, who according to the investigation is Willians' “partner” in fraud. Public prosecutors, tax auditors and state attorneys, and civil and military police officers participate in the operation. "Each real in this number is an illegal act identified, interrupted or discouraged. Creating credit is the beginning of the due process, not cash: anyone who wants to regularize has an open door, including through Resolve Já; anyone who wants to discuss it will have all the guarantees. What there will be is no advantage for those who cheat", said, in a note, the Secretary of Finance and Planning, Samuel Kinoshita. The action, called Operation Distrato, does not have targets with arrest warrants, but complies with 38 search and seizure warrants issued by the 1st Court of Tax Crimes, Criminal Organization and Laundering of Assets and Valuables of the Capital, in the cities of São Paulo, Campinas, Jundiaí, Ribeirão Preto, Londrina (PR) and Cambé (PR). How the scheme worked SP government operation targets scheme that would have withheld R$3.8 billion in tax credits Disclosure According to the investigation, the organization used shell companies, inactive or without an operational structure. These companies would issue tax documents to artificially circulate ICMS credits, which would then be incorporated into taxpayers' tax records. They pretended to have tax credits to sell to companies — generally small and medium-sized ones. But, according to the investigation, the credits were false. Companies were fined. They then simulated screens to show that the fines had been paid — which was also false. To give credibility to the scheme, the lawyer arrived at appointments by helicopter and imported cars. The Tax on Circulation of Goods and Services (ICMS) is the main source of revenue for state governments. It is a state tax that is levied on the sale of products, the provision of interstate and intercity transport services, and communications. Law firms, consultancies and intermediaries participated in the scheme, according to the investigation. They prospected clients, created contracts and prepared legal opinions to justify the operation before the tax authorities. In addition to the nucleus linked to the Nelson Wilians Group, the investigation also targets agents from the Alpha and Dmc groups. To justify the origin of the credits, those investigated alleged, for example, supposed rights of bankrupt estates or old judicial decisions of expropriation. To forge the appearance of legality, the organization resorted to practices such as: improper use of administrative rules or judicial decisions without finality to justify the credits; presentation of orders that would be false, attributed to tax auditors who did not sign them; sale of credits with no real relationship with ICMS, linked to companies with no activity; use of simulated "assignments" or "management" to formalize the illicit business. CIRA/SP opened 874 Tax Service Orders to analyze around 9,960 suspicious entries, involving more than 850 companies. The committee states that the investigation separates those who acted consciously with illicit profit from those who may have been deceived in good faith. The Treasury Department has already carried out tax checks that culminated in the issuing of tax assessment notices for 752 companies.