How to Investigate Financial Crime in Eastern Europe Using Sales Receipts
For many, printed receipts are an increasingly outdated nuisance that take up space in the bottom of our bags or the consoles of our cars. However, in some jurisdictions around the world they can be instrumental in investigating financial crime—from tax evasion to money laundering.
Sales receipts can provide essential information on the registered legal entity that a brick-and-mortar business location is tied to. This information, paired with the full-text searchable data available in Sayari Search, can be a valuable asset in financial crimes investigations involving corporate entities with smaller business units. Read below to find out how this works.
Limitations of Official Corporate Registries
While online corporate registries are a great source of information about companies, they often provide little information about their physical locations or business units. This can severely hamper a financial crime investigation, as physical locations are integral to many tax evasion and money laundering schemes.
In many jurisdictions, corporate registers are only searchable by the official name under which an entity is registered, the entity’s identification or registration number, or the entity’s director. This means the parent organizations typically get all of the attention, leaving brick-and-mortar locations with scant representation across official sources.
This can make investigating entities with multiple business units in various jurisdictions quite challenging, as oftentimes these business units comprise the entity’s public-facing identity. For instance, take the example of the American fast food chain Arby’s. The parent organization of Arby’s is an Atlanta-based company called Inspire Brands Inc.—a name bearing no reference or similarity to Arby’s.
For larger, global organizations, this doesn’t pose much of an issue—a simple Google query will usually suffice. However, for organizations in smaller jurisdictions—such as Bosnia and Herzegovina—investigators may have to get a bit more creative.
Pizza, Fraudulent Software, and Tax Evasion
Five major restauranteurs in Sarajevo pleaded guilty to charges of tax evasion and computer fraud in March of this year. The businesses were accused of using accounting software developed by another Sarajevo company also facing charges, Inspirit d.o.o. This software enabled restaurant staff to falsely report revenue to avoid paying the requisite taxes.
One of the restaurants caught up in the scandal was Pizzeria Montana, a popular Sarajevo-based pizza chain. The chain’s owner, a woman named Nejra Ibrović, was among the five who pleaded guilty in March.
Much of the local media reporting surrounding the case correctly identifies Ibrović as the owner, though searching for “Pizzeria Montana” in the Bosnian business registry yields no results. Even stranger, searching for Ibrović in the register yields a single company called “APNglobal d.o.o.” located at an address not associated with either of the two restaurant locations in the city.
Fig. 1 Excerpt from the Bosnian business registry showing Nejra Ibrović as the sole shareholder of APNglobal d.o.o.
Did local media make a mistake? Or is APNglobal d.o.o. connected in some way to Pizzeria Montana?
Leveraging Sales Receipts to Get Answers
We now have an entity charged with tax evasion but no official insight into its structure aside from media reports making claims about its purported owner. In a jurisdiction like Bosnia and Herzegovina, the chances of finding anything attributable to online official sources at this point is virtually zero.
However, there is another way to confirm the information: go get lunch.
Since Pizzeria Montana is a cash-based, customer-facing business, a Sayari Analyst bought a chicken salad at the restaurant to obtain a sales receipt. The analyst knew that Bosnian sales receipts provide identification numbers for the parent company that owns the business.
Fig. 2 Receipt from Pizzeria Montana showing the parent organization as APNglobal d.o.o.
The top of the receipt is full of information about the company—from here we can discern a great deal about its structure.
Right away, by looking at the first line of text, it is clear that APNglobal d.o.o. is indeed related to the pizzeria. The second line of the receipt tells us how it is related. It reads “P.J. pizzeria ‘Montana’ SCC.” “P.J.” stands for business unit (poslovna jedinica), confirming that the pizzeria itself is simply a branch of APNglobal d.o.o. This explains why nothing bearing the Montana name appears in the Bosnia business registry.
Below the business unit’s address, there are two numbers listed: the JIB and PIB. The JIB stands for unique identification number (Jedinstveni Identifikacioni Broj) and is similar in function to the Balkan Unique Master Citizen Number. The PIB is a tax identification number (Porezni Identifikacioni Broj). These numbers correspond to APNglobal d.o.o. and not to the specific business unit.
While the native registry in Bosnia does not allow searching by JIB, Sayari Search users can run queries by this identifier, as well as any data from the top half of the receipt.
The receipt format used in Bosnia and Herzegovina is almost identical to those of Serbia, Russia, and several other Eastern European countries. While this untraditional method of information gathering may seem out of reach, obtaining receipts does not always require traveling to the jurisdiction. Depending on the business, getting access to these slips of paper can oftentimes be crowdsourced to locals using social media or existing connections.
Instagram usually has geotags for customer-centric businesses, such as restaurants. By using these geotags, a lucky investigator might come across a sales receipt containing corporate data in the background of a food picture.
Combined with Sayari Search’s ability to query across any documented entity attribute, sales receipts enable financial crime investigators to effectively map the relationship between a business entity and its physical locations and business units— creating new avenues of inquiry previously impossible when using native registries alone.
The public records data used to power this research is available through Sayari Search! If you’re curious how this data could drive insights for your team, please reach out here.