NBI logo over a shot of the facade of its headquarters
MANILA, Philippines — The National Bureau of Investigation finally filed charges over the weekend against operators of a long-running tax fraud scheme that defrauded the government of about P50 billion in unpaid value-added taxes.
After months of investigation, the NBI filed charges against 30 people, including e-commerce businessman Bernard Chong, who is also known as an anime producer and e-sports impresario.
Chong produced animation for production houses like Netflix and Dreamworks and later founded Bren Esports, one of the biggest esports organizations in Southeast Asia.
Chong also founded the Lyka e-commerce platform, which gained some popularity in 2021, until it was shut down by the Bangko Sentral ng Pilipinas because it was not licensed as an online payment system.
Just this month, the Court of Appeals junked drug trafficking charges against Chong after it found that Chong was just an investor and had in fact divested from the cargo company linked to the P1.8-billion shipment of “shabu” intercepted in 2019.
He also founded Brenterprise International Inc. which is at the center of the value-added tax (VAT) fraud scam that was first uncovered in December last year.
The NBI Anti-Organized Transnational Crime Division said about 1,000 big and small companies used Brenterprise to fraudulently manipulate tax input credits to allow them to dodge their VAT obligations.
Fictitious purchase orders
Justice Secretary Jesus Crispin Remulla declined to identify the companies but said some were the biggest corporations in the food and real estate industry.
According to the NBI, Brenterprise made fictitious purchase orders, sales invoices, and receipts so that patron-clients could claim input credits that reduce their VAT obligations.
NBI probers, led by agent Rehom Pimentel, found that client companies would send fake purchase orders to Brenterprise, which would then use one of its dummy companies to fulfill the fake orders.
No physical office
The NBI said Brenterprise created 103 registered corporations, with 44 more under investigation, to fulfill the “orders” of their clients.
None of these companies have any physical office, the NBI said, and their operations were digitally simulated by Brenterprise employees from a condominium building at Eastwood complex in Quezon City.
Acting on information provided by a former Brenterprise employee, the NBI raided the Eastwood offices last December and seized evidence, including 24 computers that are still being forensically examined.
Remulla said he suspects that the perpetrators were in cahoots with someone from the Bureau of Internal Revenue (BIR). “There’s always a BIR official who’s directing the use of this. They have a contact there,” he said.
The NBI said the scheme operated from 2008 until December 2022, or 14 years.