The Public Prosecutor’s Office, through the Central Department of Investigation and Criminal Action (DCIAP), announced today that it has filed charges against five defendants from the Berardo Group – four individuals and one legal entity – for the crime of aggravated tax fraud. The statement released on the Public Prosecutor’s Office website does not name the defendants, but all indications suggest that one of them is Joe Berardo.
According to the Public Prosecutor’s Office, it was alleged that, in 2015, the defendants, acting in concert and with shared intent, conceived and executed a scheme designed to artificially create tax losses in an association of the Berardo Group, with the aim of improperly deducting them from taxable profits in future fiscal years.
In 2011, the aforementioned association acquired from another company in the Berardo Group, all the shares of the Spanish company and the supply credit held by the selling company. In August 2015, through a transaction lacking any economic rationale, the association transferred these same shares and credit to a foreign company controlled by it, with the sole purpose of artificially generating losses of approximately five million euros in that company, which they achieved. In 2017, the association began operating the Monte Palace Tropical Garden and receiving the respective revenues.
When submitting the 2017 corporate income tax return for the aforementioned association, given the substantial increase in revenue generated by the operation of the Monte Palace Tropical Garden, the defendants ensured that tax losses were deducted on account of this capital loss, allowing them to evade the payment of €140,358 in corporate income tax. Along with the indictment, the Public Prosecutor filed a claim for civil damages on behalf of the Portuguese State, in the amount of €140,358, plus interest.
This inquiry originated from a certificate extracted from the so-called ‘Berardo Case’, which is still under investigation and far from going to trial. The separation of the facts related to the Monte Palace Tropical Garden aimed to accelerate its investigation and trial.