On 19 July 2023, a large police operation resulted in the arrest of three individuals suspected of orchestrating a tax fraud scheme, along with other accomplices, which damaged the Public Revenue Office (PRO) budget by €837,458. The criminal association behind the fraud included party members, businesspeople and employees of the Public Revenue Office; among them was Ismet Guri, member of the DUI political party and manager at the PRO. He fled house arrest and was wanted internationally, but he later surrendered to police in Skopje. Investigations into the case by the Public Prosecutor's Office are ongoing

Following months of preliminary investigations by the Basic Public Prosecutor's Office for Prosecution of Organized Crime and Corruption into a suspected tax fraud scheme, on the morning of 19 July 2023, the Department for the Suppression of Organized and Serious Crime of the Ministry of Internal Affairs conducted a large-scale raid at seven locations in Skopje and its vicinity. The operation was based on suspicions of offences related to criminal association, tax fraud and money laundering. Three suspects were arrested during the raid, and authorities seized mobile phones and documentation.

The prosecutor's office confirmed to the media that politicians, businesspeople and employees from the PRO were among those detained and suspected. Although the prosecution did not disclose the identities of the suspects, it became known that one of those detained was Ismet Guri, a member of DUI and deputy manager of PRO-Skopje. His son was also among the suspects.

On the same day as the raid, the Department for the Suppression of Organized and Serious Crime filed a criminal complaint to the Public Prosecutor's Office against fifteen individuals and three legal entities. Specifically, eleven individuals were accused of criminal association and nine of tax fraud, and five individuals and three legal entities were suspected of money laundering. Acting on the complaint, the Public Prosecutor's Office opened a formal investigation against the suspected perpetrators.

According to the factual reconstruction of the crimes (see here and here), the following occurred: In October 2020 three suspects, including Ismet Guri, organised a criminal association with the intent to commit tax fraud. They used fictitious companies to falsely claim VAT refunds from the Public Revenue Office. Two suspects informally operated these companies and reported their activities to Ismet Guri, who, as a managerial figure within the PRO, monitored the fraudulent refunds.

Eight additional suspects joined the criminal association, with well-defined roles. Three individuals prepared documentation for tax returns, negotiated agreements for tax offsets with fictitious guarantees, and submitted VAT returns to the Public Revenue Office. Two other individuals, employed at the PRO, were tasked with approving the fraudulent requests. Furthermore, three individuals who managed some of the fictitious companies used these entities as tax guarantors to negotiate agreements with tax debtors. Through these agreements, they received goods (fuel, movable property, luxury vehicles and real estate), which they then resold to third parties, thereby obtaining funds in cash. Based on these false agreements, they issued to each other false invoices with calculated VAT. Then, they submitted these invoices to the PRO and made unfounded claims for tax refunds. Through these actions, the suspects misled the tax authority and fraudulently requested and obtained VAT refunds totalling MKD51,626,637 (€837,458).

The suspects also laundered the proceeds of their crimes by releasing MKD24,484,870 (€400,000) into legal financial channels through cash payments and transactions disguised as loans. The illicit funds were also used to purchase foreign currency and to pay invoices to domestic and foreign companies for the import or purchase of goods. Ismet Guri used part of the funds to purchase real estate worth approximately €150,000 in his son's name and additionally transferred MKD110,000 (€1,789) to his son's account. Finally, Guri gave MKD15,259,870 in cash to an individual who deposited it into his company's accounts through several daily transactions. Subsequently, these funds were transferred as loans from this company to a company owned by Guri’s son.

The Basic Public Prosecutor's Office, citing justified concerns that the detained suspects might flee, conceal and falsify evidence, or influence witnesses and accomplices, proposed detention measures for three suspects and security measures for the remaining suspects to ensure their presence during legal proceedings. The preliminary judge at the basic criminal court in Skopje accepted the prosecution's requests.

The arrest of Ismet Guri prompted allegations that he was being targeted for his support to the so-called fire group, a faction within the DUI party seeking independence from its main leadership. These accusations were denied by the Minister of Internal Affairs.

It should be noted that just five days before his arrest on 19 July 2023, Guri had received a 3-year and 6-month prison sentence from the basic criminal court in Skopje. This sentence resulted from the retrial of the 'Titanik 3' case, which involved the falsification and destruction of election material during the 2013 local elections.

Initially detained in prison, Guri was later placed under house arrest for health reasons. However, when the prosecutor's office appealed this decision, the criminal council at the Skopje criminal court reinstated his detention. In January 2024, when the police went to transfer Guri from house arrest back to prison, he had already fled the premises. National and international warrants were issued for his arrest. In August 2024, the Guri surrendered to police in Skopje. The case is in first instance procedure due to the recently start of the court proceedings.

This case has significantly damaged the state budget and undermined the country’s financial system. Corruption cases involving tax fraud and money laundering can ultimately discourage investors from engaging in business activities in North Macedonia. Moreover, the participation of public sector employees in these crimes erodes trust in public institutions’ integrity.