Lula’s Son Used ‘Non-existent Companies’ to Hide Millions of Profits from Taxation

RIO DE JANEIRO, BRAZIL – A special inspection team of the Federal Treasury has discovered that Gamecorp – a company whose partner is Fabio Luis Lula da Silva, or ‘Lulinha’ – has hired “non-existent companies”, two of which are also registered in the name of the son of ex-president Lula, to conceal millions of profits.

According to Lulinha’s income statements from 2013 to 2015, Gamecorp transferred R$2.8 million (US$700 thousand) to G4 (Entertainment and Digital Technology company) and LLF (Holding company), which subsequently distributed tax-exempt profits in the amount of R$2.9 million to Lulinha himself.

According to the tax authorities, the transaction was effected so that the businessman would not pay taxes.

As a result, the body brought proceedings for criminal prosecution, which may result in a penalty of two to five years in prison. A further four companies dealing with Gamecorp were also non-existent, including engineering firms.

“In addition to the anomaly of contracting party and contractor being the same person, the amounts involved are noteworthy, much higher than those paid to other service providers,” says the Treasury in one of Gamecorp’s inspection reports.

“The services were provided by these two companies, G4 and LLF, in the person of Fábio Luís, who thereby hired himself through two different companies in the period, continuously and not cumulatively, receiving compensation to perform the same activities that he performed as CEO of Gamecorp”.

The Treasury tracked the facade companies and found them to be non-existent. In one of the inspection reports, there is a special chapter on the “Factual Non-existence of Service Providers”, which includes excerpts from the investigation and even photos of the locations that Lulinha had provided as to where the companies would be based.

At the tax address reported by the LLF to the Treasury, there is only an empty, fenced plot of land with a satellite dish within the lot. “No trace of the company,” reports the Treasury.

Summoned to provide clarifications, the LLF told the authorities that the land was rented by Gamecorp itself. “The LLF has not even employed staff at any time,” says the Treasury.

Another investigation proved that the G4 also did not exist at the declared address in São Paulo. Moreover, the G4 had no employees between October 2015 and May 2016.

“At least from 2011 to the present day, the company G4 Entertainment is in fact non-existent. When questioned, Fábio Luís was not willing to prove the existence of the companies hired by Gamecorp and which later transferred funds to him.

The son of ex-president Lula has problems to spare.

This week, he was the target of a new stage of Operation Lava Jato, which will determine whether money received by Lulinha and his partners was used to pay for the purchase of the Atibaia farm, the same one that yielded Lula a seventeen-year sentence in prison.

Lulinha and his partners Fernando Khalil and Jonas Suassuna’s companies, formal owners of the farm, received R$172 million from Oi and Vivo between 2004 and 2016.

During this time, Lulinha lobbied for Oi’s demands to be accommodated by his father’s government, which in fact occurred.

Source: Veja