Over the past few months the financial crimes squad (SDOE) has arrested more than 60 people over debts to the state and the economic police about another 40. The state may believe that it will be getting its money from these people, but the truth is that the suspects cannot only buy a lot of time once in the court process, but can also reduce the amount owed.
The majority of people suspected of owing large amounts of money to the Greek state are looking at two separate court battles. The first is at an administrative court, where the exact amount of the debt is decided.
For debtors to be able to present their case to an administrative court, they normally have to pay a percentage of the money that is allegedly owed. However, under certain conditions they can file an appeal and get a hearing without making a down payment.
The hearing will begin in a first instance court; however dockets are so backed up that it may take as long as three or four years to call a financial case. Once a ruling is made, defendants can take their case to an appeals court, which may take another three years or so. If they decide to take the issue to the country’s highest administrative court, the Council of State, then another year or two can bring the total time it takes to decide upon one facet of a single financial case to a decade. This means that debtors can win a good deal of valuable time, during which they can also request a freeze on measures taken by the state in a bid to ensure that it gets something back, such as seizing assets.
Meanwhile, those with debts to the state in the form of unpaid social security and other such payments cannot be imprisoned, while tax evasion is considered a criminal offense and tax dodgers face criminal courts. Owing above 75,000 euros in unpaid value-added tax is a felony and below this amount a misdemeanor. At the same time, if the debt concerns tax on turnover and is in excess of 150,000 euros, then that is a felony as well, while a debt lower than that is a misdemeanor. According to the law, prison time begins at one year for people owing more than 5,000 euros and reaches three years for those owing more than 150,000 euros. Debtors, however, can buy off their prison time if they have received a sentence of three years or less on misdemeanor charges. Therefore, in theory, someone who owes the state more than 150,000 euros and receives the minimum sentence from a sympathetic judge can buy off his or her incarceration time.
So, what happens when debtors are arrested on felony charges? Their case is presented to a prosecutor who decides whether or not to send them directly on to the relevant court, which is a three-member criminal appeals court. If that court is not in session at that particular moment, then the prosecutor has to let the suspects go after they have paid a part of the money owed. A court date is set around 6-10 months later. If the offender’s lawyer can’t make it to court on that day, then the trial is suspended for another year. The law does not allow trials to be suspended twice, but this is often overlooked. When the trial does take place and the suspect is found guilty, he or she can receive a prison term of five years or more.
“If, however, they manage to prove mitigating circumstances, as is usually the case, the sentence is reduced to below five years,” explained law expert Takis Kousais. “And most importantly, if the accused has no criminal record, the sentence is suspended. On a practical level this means no criminal punishment, just payment of court expenses. The court does have the right to impose a monetary sentence, which is usually quite small and is not paid at once, but is passed on for collection from the tax authority, where it is paid, if it’s paid, in installments.”
In most cases, debtors come to an agreement with the tax authority, they pay the first installment agreed and then they are let out of prison conditionally. If they do not pay subsequent installments, the tax office is supposed to inform the authorities, which can initiate another criminal case.