SP applies record fine of R$1 billion to Fast Shop for ICMS fraud

The government of São Paulo imposed a fine of R$1.04 billion on the Fast Shop retail chain after concluding an administrative process that claimed there was billion-dollar fraud involving ICMS credits. According to the state, this is the largest penalty ever imposed in the country based on the Anti-Corruption Law.

The decision was taken after investigations confirmed that they had confirmed a scheme for manipulating tax data and improper access to São Paulo tax administration systems. Authorities claim that the company used privileged information to obtain irregular approval of tax credits and artificially reduce its tax burden.

The case arose from the developments of Operation Ícaro, which investigates tax corruption involving private companies and public servants. The São Paulo government claims that Fast Shop hired a consultancy linked to a former tax auditor to operate the scheme.

According to investigations, the group accessed internal state systems using the company’s own digital certificate. From this, he carried out what investigators called “tax data mining”, with the insertion of fraudulent information to validate tax credits irregularly.

The investigations analyzed around R$1.59 billion in financial and tax transactions. According to the São Paulo government, it was proven that R$1.04 billion in ICMS credits had been illegally obtained, an amount that served as the basis for imposing the fine.

The São Paulo management stated that the penalty took into account the size of the loss to public coffers and the degree of sophistication of the scheme. The authorities’ understanding was that there was a deliberate attempt to interfere in tax inspection and obtain undue advantages from public agents.

The progress of the investigations also affected state employees. According to the government, five public servants have already been fired as a result of the investigations, one has been dismissed and another 61 administrative procedures have been opened to investigate possible irregularities.

Operation Ícaro is part of a broader state offensive against structured tax fraud and corruption schemes involving tax compensation. Behind the scenes of the São Paulo government, the case began to be treated as a milestone in the attempt to toughen administrative punishments against large companies involved in tax embezzlement.

Contacted by InfoMoneythe company did not comment until the publication of this article.