Adrian Șandru: “In certain situations, the offence of tax evasion can now also be investigated by the European Public Prosecutor’s Office”
Here is a very interesting interview with one of the best emerging criminal lawyers in Romania. Adrian Șandru, an experienced lawyer specializing in criminal law, focusing on international judicial cooperation and whistleblowing, who recently launched his book entitled European Public Prosecutor. Regulation. Disputes. We discussed the criminal implications of various gambling offences, such as slot machine fraud, the criminal risks to those who violate the European AML Directives, and the black market and the risks of its re-emergence with the over-taxation of our industry this summer.
Adrian Șandru
Slot machines fraud. You have certainly heard about this. There have been situations of which we are aware, in which various people have managed to “tamper” with machines, sometimes with internal help, sometimes using sophisticated technology and have caused damage to operators of thousands or tens of thousands of euros. For those who think they can make “easy money” this way, what do you tell them? What criminal legal problems do such people risk?
These cases are well known and have often reached the prosecutors agenda or even the court. Whether we are talking about a ‘simple’ crime of cheating or even more complex mechanisms, involving the commission of computer crimes or offences of constituting an organized criminal group, there are several effective legal methods that require an active conduct of prevention on the part of companies operating in the gambling area. I often represent legal entities at an early stage when it is intended to identify fraud and subsequently recover damages. I would like to mention that there are services offered by private investigators which, combined and coordinated with the expertise of a criminal lawyer, can produce results quickly, in the sense that the information obtained will be further used by the authorities in a criminal investigation. In other words, there are modern and effective legal methods to combat this phenomenon and to compensate for the possible passivity of the authorities. I believe, however, that these methods will become more widely known and used with the change in the collective mentality to call in a criminal lawyer not only when there is already a proceeding pending before an authority but from the first moment there is an indication that certain persons/employees are defrauding the company.
Still in the area of slot machine fraud, there have been situations in the past where people from gambling companies have tried to earn more money and have modified certain things in the slot machines and changed their technological parameters and metrology. In your experience have you heard about such cases? What would risk the people involved in this in criminal terms?
Without being very technical, I can state in general terms that with the evolution of technology and the computerization of many processes in the gambling area, in addition to the classic crimes that protect the assets of companies (embezzlement, fraud or breach of trust), computer crimes are increasingly committed. More specifically, when a computer system is accessed or data is changed without right by an employee in a computer system, in order to hide the traces of a crime, the legal conditions for the apprehension of computer crimes such as computer forgery or illegal access to a computer system will most often be met. Of course, depending on the specific way in which it is acted upon, the offences committed may be different, so a lawyer specializing in this area of criminal law may be able to guide a company as to which authority to approach. For example, most cybercrimes fall within the investigative jurisdiction of the DIICOT. Therefore, it is very important that when potential offences are identified to be committed, the competent prosecutorial unit investigating them should be referred directly in order to increase the chances of recovering damages in an optimal time. In situations of this kind, a delay of days/weeks in “transferring” the file from one prosecution unit to another could mean less chance of punishing the perpetrators and recovering the damage suffered.
On 7 January 2022, the Order of the President of the ONJN no. 370/2021 approving the Instructions on preventing and combating money laundering and terrorist financing in the field of gambling (AML Instructions) was published in the Official Gazette. Thus, after more than two years of waiting, the new AML regime in the gambling sector has finally been completed/finalized, making it extremely clear what obligations licensed operators must comply with. What are the criminal risks for those who violate the EU AML Directives?
Yes, after several years in which there have been discussions even in the legal field related to the gambling area, it seems that now there is a clear regulatory framework that imposes more obligations on the players in this market. The order you are talking about merely refers to the sanctions section of the Anti-Money Laundering Act 129/2019. There are significant fines for non-compliance with legal requirements of up to 5,000,000 lei. I would like to point out that beyond potential fines for contravention, failure to comply with legal requirements such as the reporting obligation can draw the company into a fraudulent scheme and expose it to a criminal investigation that is highly damaging to any gambling company or individuals in their management, with negative effects in the medium and long term.
The black market has made a comeback in the gambling industry with the amendment of the Tax Code from 1 August 2022 and the Ordinance amending and supplementing GEO 77/2009. With these legislative changes, the Government has overtaxed an area that is already burdened with taxes. But the hardest thing for our industry is that these mega tax increases come after 2 years of pandemonium during which our field was completely shut down for months at a time, and then closed and opened according to incidence rate and then restricted until it was left completely undermanned and underfunded. Under these conditions, is there a risk of the black market to reappear? How big can this risk be? What do you advise those who may take it the wrong way? What criminal risks are they exposed to? Also, what would you recommend to governments?
Unfortunately, experience has shown, not once, that these measures are usually ineffective and lead to a greater discrepancy between the real economy and the official tax collection figures. In many cases, the burden of over-taxation causes some companies not to prioritize accurate revenue reporting and become exposed to criminal investigations for the crime of tax evasion. In practice, it has been observed that ANAF investigations and referrals to the public prosecutor’s office on this type of offences, in which in addition to the damage consisting in the amounts of money owed and not paid to the state budget, sometimes even excessive surcharges are added, lead to the bankruptcy of once profitable businesses. I believe that any business should also have medium and long term projections and take into account all the risks it exposes itself to when resorting to certain “tax optimization” methods. I recommend consulting tax experts together with lawyers specializing in the area of Tax Law before taking certain decisions, all the more so as, in certain situations, the offence of tax evasion can now also be investigated by the European Public Prosecutor’s Office.
As far as the government is concerned, I believe that I belong to a majority group that works in the business area on a daily basis and which maintains that measures with a major impact on a business budget cannot be taken without an assessment of the budget, without prior consultation with all the stakeholders affected by the measures and without a coherent medium and long-term strategy that generates predictability for investors.
Adrian Șandru
Bio:
Adrian Șandru – Senior Associate act Botezatu Estrade Partners.
One of the best emerging criminal lawyers in Romania. Experienced lawyer specializing in criminal law, focusing on issues of international judicial cooperation and whistleblowing, having recently launched his book entitled European Prosecution. Regulation. Disputes. Explanations in both Romanian and an adapted version in English. Adrian has gained a wealth of experience representing individuals and companies in the most complex economic and financial cases in recent years, collaborating with the most prestigious law firms in the field of business criminal law in Romania.
In 2019, the lawyer Adrian Șandru received the Rising Star in White Collar Crimes Matters award from the Romanian Journal of Criminal Business Law. In 2020 and 2021 Adrian received the “Dreptul” Magazine Award for scientific publishing in the field of law. That was the first time a person received this distinction in two consecutive years, in Romania.
Moreover, Adrian is an expert on behalf of Romania in several projects on international cooperation in criminal matters for Eurojust or the Council of Europe.
