The Luxembourgish government alone probably lost about €10 million through Shah's tax fraud schemes.
The Luxembourg-based investigative journalism platform "Reporter" researched the scandal which made waves across the globe and might even have been approved by the government.
Shah owned a whole network of shell companies and faked deals worth millions. He was then reimbursed for his investments by the tax administration and pocketed the money, even though he was never really entitled to it. This way, he defrauded the Luxembourgish government out of about €10 million and raked in billions across the globe.
According to Reporter, the Luxembourg tax administration even enabled Shah through a special tax ruling. Shah's spokesperson confirmed this in writing, but Luxembourg's Ministry of Finance has yet to comment on the allegations.
Shah created four shell companies in Luxembourg that allowed him to defraud the government - and by extension the citizens of Luxembourg. Today, one of these four shell companies is still in existence.
Shah is suspected of money laundering and large-scale tax fraud. One of the liquidators in charge of looking into the bankruptcy of one of the three shell companies currently out of business told Reporter that he noticed irregularities in the company's bookkeeping.
The extent and the exact manner in which the fraud was carried out has yet to be discovered, which is made very difficult by the fact that many transactions recorded in the books actually never took place.
In December 2018, Luxembourg's justice department ordered search warrants into several companies with ties to Sanjay Shah. The examining magistrate is currently investigating Shah on the suspicion of tax fraud. This was confirmed by a representative of the justice department.
Alongside several other countries, Denmark also recently launched an investigation into Shah. Here, he reportedly raked in €1.65 billion over the course of four years.
