Source: CNA
The Supreme Court on Thursday acquitted most of the defendants in a case involving irregularities in the Cyprus Investment Programme (CIP) related to the naturalisation of investor Mohamed Salem and his family. The court dismissed charges of conspiracy and forgery but convicted some defendants of tax concealment and fraudulent VAT evasion.
The seven defendants faced charges related to offences allegedly committed between 2017 and 2019 in the context of naturalisation applications under the CIP. According to the Prosecution, these offences came to light following a report by the Investigative Committee on Exceptional Naturalisations of Foreign Investors and Entrepreneurs, chaired by former Supreme Court President M. Nicolatos.
The accused—lawyers, businessmen, and land development companies—were charged with collaborating to secure foreign naturalisations through the CIP by submitting false information to authorities. Specifically, the charges alleged that the naturalisation applications of Mohamed Salem, Bahaa Salem, and Esraa Salem included falsified financial data to demonstrate compliance with the required €2 million investment criterion stipulated by Cabinet decisions.
However, after reviewing the evidence, the Court ruled that the Prosecution failed to prove the existence of a conspiracy to defraud the Republic of Cyprus beyond reasonable doubt. The Court noted that while procedural errors and irregularities were present in the documentation, these did not amount to fraud. Furthermore, the Prosecution was unable to show that the management agreements were intended to mislead the State or facilitate the return of funds.
As a result, the majority of the defendants were acquitted. Nevertheless, the Managing Director of Larina Estates Ltd and the company itself were convicted of offences related to the non-payment of VAT. The judgment revealed that they had submitted false declarations to the Tax Department, concealing substantial sums from the sale of real estate. These offences spanned three tax periods, with the unpaid VAT amounting to €335,296.
The Court found that defendants 2 and 4 had knowingly concealed invoices and revenue from the sale of apartments that did not qualify as permanent residences, as required by law to apply the reduced VAT rate.
In total, the seven defendants faced 18 charges, including conspiracy to defraud, forgery, fraudulent VAT evasion, and submitting false tax declarations. While most defendants were acquitted, two were found guilty of specific tax-related offences.
Notably, lawyer Fotos Tsangarides, Zavos Group director Michael Michael, PHC Tsangarides LLC, Fullserve Secretarial Ltd, and lawyer Elli Michaelidou were all acquitted of charges such as conspiracy to defraud, forgery, and making false representations to the State. The Court ruled that the Prosecution had failed to present sufficient evidence to substantiate these allegations.
In contrast, Michael Zavos, the Managing Director of Larina Estates Ltd, and the company itself were convicted of fraudulent VAT evasion and submitting false declarations to tax authorities.
