Lycamobile’s French companies were on Thursday fined 10mn euros by a Paris court for money laundering and value-added tax (VAT) fraud.
The group’s former chief executive officer Christopher Tooley also received a prison sentence and a heavy fine for complicity in the VAT fraud, agency reports said.
Lycamobile, owned by Subaskaran Allirajah, has said it disagreed with the decision and had appealed.
Four months after the trial ended, the court ruled that the companies had “knowingly participated in a complex and elaborate system of money laundering” between 2014 and 2016, which involved 17mn euros.
This system involved a series of shell companies, two Lycamobile salespeople and resellers in the Parisian district of La Chapelle, the reports said. It operated for the benefit of construction companies demanding cash to illegally pay employees.
The companies were also found guilty of having “deceived” the tax authorities in a “misguided” legal regime allowing exemption from VAT, within the framework of a “strategy” to be more “competitive”.
“The money laundering accusations concern the activities of two salespeople who were laid off and fired upon discovery of this parallel activity,” Lycamobile said. Lycamobile Services was fined 3mn euros and Lycamobile France 7mn euros.
Mr. Tooley was sentenced to three years’ imprisonment and fined 250,000 euros. He is banned from managing a business for five years. The group’s other British leader, Andrew England, was released.
Lycamobile’s General Manager in France, Alain Jochimek, was sentenced in both parts of the case, to three years in prison, including eighteen months to be served under an electronic bracelet, with a fine of 120,000 euros. He was also prohibited from managing a business for five years.