A Paris court has imposed a 10 million euro fine on Lycamobile’s French entities for engaging in money laundering and value-added tax (VAT) fraud. Lycamobile, which is also involved in data services primarily in Uganda, has been dealt a significant blow by this legal judgment.
The former CEO of the Lycamobile group, Christopher Tooley, has been handed both a prison sentence and a substantial fine due to his involvement in complicity with the VAT fraud, as reported by various agencies.
Lycamobile, owned by Subaskaran Allirajah, has expressed its disagreement with the court’s decision and has opted to appeal the verdict.
After a four-month deliberation period following the conclusion of the trial, the court determined that these companies had “knowingly participated in a complex and intricate money laundering scheme” that spanned from 2014 to 2016 and involved a sum of 17 million euros. This operation revolved around a network of shell companies, two Lycamobile sales representatives, and resellers operating in the La Chapelle district of Paris. The scheme was designed to benefit construction companies seeking to pay their employees under-the-table.
In addition to the money laundering charges, the companies were found guilty of having misled tax authorities by exploiting a “misguided” legal framework that allowed VAT exemption, all as part of a “competitive” strategy.
Lycamobile responded to the allegations of money laundering by stating that they related to the actions of two terminated sales representatives who were fired upon the discovery of their illicit activities. Lycamobile Services received a fine of 3 million euros, while Lycamobile France was fined 7 million euros.
Mr. Tooley was sentenced to three years in prison and fined 250,000 euros. He has also been banned from holding a managerial position in any business for a period of five years. In contrast, the other British leader within the Lycamobile group, Andrew England, was released.
Furthermore, Alain Jochimek, Lycamobile’s General Manager in France, received a three-year prison sentence, with eighteen months to be served while wearing an electronic bracelet. He was also fined 120,000 euros and similarly prohibited from managing a business for a duration of five years.
