Embezzlement is a significantly bigger problem within Colombia’s tax agency (DIAN) than was previously expected, according to the agency’s director.
Since 2004, government money lost to fraud embezzlement has amounted to over $1 billion dollars, said DIAN Director Juan Ricardo Ortega in an interview with the El Espectador newspaper.
The announcement comes one week after 13 DIAN officials were arrested for their involvement in a fraud and embezzlement ring. At the time, it was believed the embezzlement started in 2008 and totaled only $150 million. The ongoing investigation, however, has uncovered that the embezzlement started much earlier and involved more than six-times the amount of money originally thought.
MORE: Colombia tax officials arrested for alleged involvement in $150M embezzlement scheme
For years, the group in question allegedly set up fake export companies and received reimbursements on the sales tax (IVA) attributed to those fronts. So far, 19 alleged members of the ring have been arrested, including 13 active DIAN employees.
In an interview with El Espectador, Director Ortega said an ex-employee of the tax and customs agency approached him when he took charge of the agency to present an investigation on embezzlement and fraud in the institution.
According to Ortega, there were 3,600 registered export companies in Colombia when he reached office, of which 600 were located in the city of Cucuta. The odd and concentrated grouping of these companies alongside an unexplained high number of customs offices raised suspicions, he said. The companies in Cucuta alone were being reimbursed around $1.5 billion annually.
When asked if the embezzlement ring included the upper echelons of the DIAN, Ortega responded, “I do not have the authority to say, but it is hard to believe that something of so many years and so much money could go completely unnoticed. That is something that the judges will have to decide. Needless to say, there will be an investigation into material riches and the economic well-being of certain individuals within the agency.”
Director Ortega said the agency has shut down 15 customs offices throughout the country and, of the 3,600 registered exporters, only 250 are currently operating, while legal and regulatory control of exports can be guaranteed.
Colombia’s export boom in 2004 marked the beginning of a sophisticated and well-developed mafia within the state tax and custom’s agency to embezzle tax reimbursements on exports. All the tax and customs officials arrested had been with the agency for over 20 years, said Ortega.
Sources
- ‘No me equivoco: el desfalco a la DIAN es de $2 billones’ (El Espectador)