Defense in Cases Involving Fictitious Entrepreneurship

VINCO’S Legal Company provides comprehensive criminal law defense for businesses, owners, directors, accountants and other officers in proceedings related to so-called fictitious entrepreneurship, fictitious counterparties, sham transactions, tax credit issues and the use of primary documents in business operations.

In Ukrainian practice, the term “fictitious entrepreneurship” is often used by law enforcement authorities to describe allegations concerning the reality of business transactions, although the legal qualification may be made under other provisions of criminal law. For this reason, defense must start with a proper analysis of the allegations, evidence, company documents and the actual substance of transactions.

Such cases require a quick response because the risks for business may include searches, seizure of documents and equipment, freezing of accounts, summons for questioning, tax assessments, reputational damage and personal liability of company officers.

Legal assistance is required not only after a notice of suspicion. In cases involving fictitious transactions or counterparties, it is important to involve defense counsel already at the stage of requests, summonses, searches, temporary access to documents or first contacts with investigators.

• the company is linked to allegedly fictitious counterparties or transit companies;
• law enforcement authorities question the reality of business transactions;
• the investigation reviews tax credit, expenses, primary documents or money flows;
• the director, accountant, managers or employees are summoned for questioning;
• a search has been conducted at the company or there is a risk of a search;
• documents, seals, servers, laptops, phones or other data carriers have been seized;
• company accounts, property or corporate rights have been frozen or arrested;
• the company appears in a criminal proceeding because of relations with suppliers or customers;
• there is a risk of suspicion being served on the director, accountant or beneficial owner.

Defense in such cases includes more than participation in investigative actions. The key objective is to demonstrate the real substance of business transactions, absence of intent, proper documentation, actual performance of contracts and the lack of grounds for the investigators’ conclusions.

VINCO’S reviews criminal case materials, contracts, acts, tax invoices, payment documents, logistics, correspondence, primary documents, accounting data and employee explanations. After that, a legal position is prepared for the investigator, prosecutor, investigative judge or court.

• analysis of the criminal proceeding and business risks;
• preparation of a legal position regarding the reality of business transactions;
• support for the director, accountant and employees during questioning;
• lawyer’s participation during searches, inspections, temporary access and seizure of documents;
• challenging unlawful actions of investigators or prosecutors;
• motions for the return of seized property and documents;
• cancellation of arrest over accounts, property, equipment or corporate rights;
• work with expert examinations, expert opinions and financial documents;
• defense of company officers in case of a notice of suspicion.

• defense of businesses in criminal proceedings involving fictitious counterparties;
• defense in cases concerning sham or non-real business transactions;
• defense of directors and accountants in tax credit-related cases;
• support in proceedings involving alleged forgery or use of primary documents;
• defense where a commercial dispute is being shifted into a criminal law context;
• challenging arrest of property, accounts, documents and electronic data carriers;
• representation of the business during investigative actions;
• preparation of evidence confirming the reality of transactions and business purpose;
• defense in court and at the pre-trial investigation stage.

In such proceedings, investigators often rely on general conclusions about a counterparty’s risk profile, lack of resources, employees, warehouses, transport or production capacity. For defense, however, it is important to prove not formal characteristics of the counterparty, but actual performance of a specific transaction and the company’s good faith.

VINCO’S lawyers review contracts, acts, invoices, payment documents, transport documents, warehouse records, correspondence, delivery confirmations, technical tasks, reports, photographs and other materials that may prove the reality of the transaction.

In cases involving fictitious transactions, investigators often seek explanations or testimony from the director, chief accountant, procurement managers, logistics staff, financial employees and other persons involved in document flow or communication with counterparties.

A lawyer prepares the client for questioning, defines the scope of explanations, prevents self-incrimination risks, accompanies the investigative action and records procedural violations. This is especially important when a person formally has witness status but may in fact be a potential suspect.

A search or temporary access to documents in such cases can paralyze a company’s operations, especially if servers, laptops, phones, accounting documents, seals or primary documentation are seized.

VINCO’S accompanies searches, controls the limits of the investigative judge’s order, records violations, objects to unlawful seizure, prepares motions for the return of documents and equipment, and helps restore normal business operations.

Financial and business documents, tax materials, expert opinions, analytical reports, bank statements and accounting data are crucial in such cases. Mistakes in explaining these documents may create risks for the company and its officers.

A lawyer helps build the evidence base, prepare written explanations, involve specialists, formulate proper questions for experts, challenge unfounded conclusions and demonstrate the economic logic of transactions.

1. Initial consultation and identification of real risks for the business, director, accountant and owner.
2. Review of the criminal proceeding, court orders, requests, protocols, documents and facts.
3. Verification of business transactions, counterparties, primary documents, payments and tax materials.
4. Development of a defense strategy and position regarding the reality of transactions and absence of intent.
5. Preparation of the director, accountant, employees and company representatives for questioning.
6. Lawyer’s participation in searches, questioning, temporary access, inspections and other investigative actions.
7. Preparation of complaints, motions, statements, explanations, objections and procedural documents.
8. Challenging arrests over property, accounts, equipment, documents or other business restrictions.
9. Court defense, support at the pre-trial investigation stage and control over implementation of procedural decisions.

• company registry extract, constitutional documents and information on management structure;
• court orders, investigator or prosecutor resolutions, requests from law enforcement authorities;
• search, temporary access, questioning or other investigative action protocols;
• contracts with counterparties, amendments, acts, invoices and specifications;
• tax invoices, payment documents, bank statements and accounting data;
• documents concerning supply, transportation, storage, performance of works or provision of services;
• correspondence with counterparties, technical tasks, reports, photographs or other proof of performance;
• information on officers, employees and persons who have been or may be summoned for questioning;
• a factual timeline with dates, counterparties, transactions and previous contacts with investigators.

• incorrect explanations by the director or accountant may be used against the company;
• late response to a search or asset arrest may stop business operations;
• an incomplete document package may create the impression that transactions were not real;
• formal communication with investigators without a strategy may increase suspicion risks;
• missed appeal deadlines complicate the return of property, equipment or documents;
• without analysis of accounting and tax documents, it is difficult to prove the real substance of transactions;
• a commercial or tax dispute may be artificially used as criminal pressure on the business.

VINCO’S helps businesses build an effective defense in cases involving fictitious transactions, counterparties and primary documents. We analyze risks, prepare company officers for investigative actions, accompany searches and questioning, challenge arrests, return seized property, build the evidence base and protect the company’s interests at all stages of criminal proceedings.