Sheikh Enterprises, the jewellery and clothing store hit by a brazen daylight robbery in Oslo last month, was one of several local gold merchants suspected of tax evasion after a joint operation by Norwegian tax, police and customs authorities two years ago. The case is still underway, reports newspaper Dagens Næringsliv (DN), with Sheikh Enterprises facing tax claims of more than NOK 12 million (USD 2 million).
“Six of the 10 gold merchants audited have had their reportable taxable revenues raised by NOK 47 million,” Jan-Egil Kristiansen, the head of tax crime at Norway’s eastern tax district, Skatt Øst, told DN. He added that the merchants allegedly had also underreported the amount of VAT (called moms or MVA in Norway) they owed by a total of NOK 20.7 million, and that customs investigations found links between several of them.
DN reported that the tax claims had not been resolved when the dramatic robbery of Sheikh Enterprises occurred, which resulted in the disappearance of most of the shop’s valuable assets. Those controlling Sheikh Enterprises already had been hit with the claims for underreporting of taxable revenue and back taxes last fall, and faced a hearing scheduled for this week that was likely to force them into bankruptcy.
“The six shops have all imported gold from Asia, and declared it at customs here in Norway at values that were far too low,” Kristiansen told DN. “For example gold products were declared and recognized to contain 4-carat gold, while the products in reality contain 22-carat gold. So taxes have been evaded. In addition extensive illegal sales of gold products have been discovered.”
In January this year, the tax authorities secured a court order to seize up to NOK 4.2 million in assets at Sheikh Enterprises. The court order stated that the gold and clothing store was suspected of withholding MVA, tax and customs duties amounting to NOK 12.8 million between 2008 and 2011. If the book value of gold sales is correct, it’s alleged, Sheikh Enterprises has sold wares at a price which on average is lower than the price it paid, while the amounts the business gave to its insurance company showed a far higher price than that included in its financial statements.
Last November Sheikh Enterprises was warned about its disputed tax, VAT and financial accounts, along with the imposition of additional taxes, punitive additional tax, surcharges, coercion and charges of selling second-hand gold without permits, according to the court ruling. Furthermore, customs officials had an outstanding claim for NOK 3.5 million, and intended to take Sheikh Enterprises to the Oslo bankruptcy court on Wednesday.
Late last month four masked robbers armed with automatic weapons stormed Sheikh Enterprises at midday on a busy Saturday in Grønland. They smashed glass cases and grabbed valuables, before running back out into the street and firing shots into the air. Their getaway car was found on fire about a block away a short time later. Police found a second getaway car at the start of April, and arrested a suspect a week later.
DN contacted Sofia Ahmad, the chairwoman of Sheikh Enterprises, but she refused to comment on the tax claims or the bankruptcy petition. Her son Quasim Ahmad who runs the store could not be contacted. Police inspector Einar Aas who is leading the investigation into the robbery would not be drawn on any links between the tax evasion case and the heist. “We are aware of the arrest ruling, but have no immediate comment on that,” he said.
Kristiansen told DN the purpose of the 2012 action against the shops was to make sure the sellers had permission to to sell gold products bought from individuals, but four of the seven stores that should have had permits lacked them. They received fines between NOK 50,000 to 100,000.
“The background to the action was the sharp increase in gold prices which from 2010 to 2011 meant that the number of permits granted for the sale of second-hand gold increased from eight to 93,” said Kristiansen. “The purpose of requiring permits is to discourage illegal trading.”