THE “LORD of Zemplín” still has a chance to avoid a lengthy prison sentence. Mikuláš Vareha, the entrepreneur who owes his nickname to his extravagant business and private activities, including a trade in bark beetles, was sentenced to 11 years in prison earlier this year for tax evasion, but now the Supreme Court has overturned the verdict.
Vareha was accused of tax evasion in 2011 and his case was considered to be one of the biggest of its kind in Slovakia’s history.
At that time the Slovak media, when reporting on Vareha’s arrest, noted his alleged ties with President Ivan Gašparovič and his wife, with whom he appeared in several pictures taken in the presidential palace.
Huge tax evasion suspected
Vareha was arrested by police on March 1, 2011. At the time he had been in business for 12 years and acted as the authorised representative of more than 70 firms trading in a wide variety of goods and commodities, including bark beetles, cowshed compost and wooden gates. Between 2007 and 2010, the state refunded €32,729,204 in VAT to the businessman, state officials said at the time of his arrest.
Vareha, 51, was convicted of committing tax evasion between 2008 and 2011, mainly in the Trebišov district in eastern Slovakia, where he claimed to have traded 55.3 million tree grafts and 414.2 million bark beetles, according to the Special Prosecutor’s Office. In November 2012 Vareha claimed the bark beetles, which are normally regarded as a major tree parasite, were used as food for pheasants.
The Specialised Criminal Court sentenced Vareha in April 2013 to 11 years in prison for VAT and other tax and insurance payment evasions that deprived the state of €58.1 million in revenue. The court also imposed a personal €100,000 fine on Vareha. Vareha claimed he was innocent and appealed the verdict.
The Supreme Court accepted Vareha’s complaint this November, calling it “partially founded”, and returned the case to the Specialised Criminal Court. The Supreme Court questioned several steps the court had made, for example, criticising it for using evidence “which was not in compliance with the law”. Moreover, the Specialised Court allegedly broke the law when it forced Vareha’s lawyers to be present when reading the verdict, even though Vareha had dismissed them a few days before it was issued, as reported by Etrend.sk website.
The Supreme Court also said that the Specialised Court judges did not allow Vareha’s new lawyer to make a closing argument, the website wrote.
The extravagant businessman
The interior minister at the time of his arrest, Daniel Lipšic, stated that Vareha apparently thought his political connections would allow him to cover up millions of euros in tax fraud.
In 2011 the Sme daily reported that it had found 136 firms in Slovakia’s business registry under Vareha’s name, including dozens of wood processing firms, water transport companies, construction contractors, and real estate businesses as well as firms trading in Tokaj wine. Sme also wrote that several years ago Vareha had built a mini-zoo containing wild boar, ostriches and deer but local residents complained about the smell and said that the animals were suffering.
Sme added that Vareha apparently enjoyed being in the spotlight and wrote that in early 2009 he had passed out apples to people along with Silvia Gašparovičová, the wife of Slovakia’s president. Marek Trubač, spokesperson for the President’s Office, stated back then that the office does not look into the tax affairs of those who make donations to the foundation headed by the president’s wife, adding that Gašparovičová did not have any other business activities with Vareha.
Accomplice pled guilty
While Vareha now has a chance to avoid prison time, his alleged accomplice in one of the tax evasion cases, Hungarian citizen Mihály Molnár, has pled guilty to the crime and is to serve five years in prison. He is currently detained in one of Slovakia’s prisons, and has requested to be transferred to a prison in Hungary, Sme reported.
Molnár was a representative of the company to which Vareha allegedly provided millions of tree grafts. The two men closed more than 20 invoices between May 2009 and January 2010, but the investigators now claim that the business took place only on paper, according to Sme. Molnár thus helped Vareha evade taxes, causing Slovakia a loss of €19 million.
25. Nov 2013 at 0:00 | Michaela Terenzani