NBI probes 103 ‘ghost’ suppliers in P50 billion tax scam

MANILA, Philippines — The National Bureau of Investigation (NBI) is looking into 103 “dummy or ghost supplier corporations” allegedly used by esports executive Bernard “Bren” Chong’s wholesale business to defraud the government of at least P50 billion in taxes.

According to its 32-page complaint filed before the Department of Justice (DOJ) on Friday, the NBI Anti-Organized and Transnational Crime Division identified the ghost suppliers used by Chong’s “fraudster company” Brenterprise International Inc. in the manufacture of fake receipts.

Chong is also CEO of Bren Esports, a company that takes part in gaming tournaments.

The NBI agents obtained the list of suppliers during a raid on Brenterprise’s Eastwood office in Quezon City in December last year.

On Friday, Justice Secretary Jesus Crispin Remulla described the scheme as a “fake receipts scam” through which companies can lower their income tax payments by jacking up their expenses using the fake receipts from dummy suppliers.

Brenterprise personnel allegedly fabricate receipts of ghost supplies to jack up the actual expenses against gross income in order to lower the income tax to be paid to the government.

“These are fake receipts being submitted to pass off as deductions, which is a violation of the National Internal Revenue Code and the Revised Penal Code,” Remulla said.

“It’s a very sophisticated operation, a systematic way of defrauding the government,” he added.

The companies that availed of Brenterprise’s services will also be held liable for evading taxes. Remulla said Chong’s clients are the “big corporations in the country in food and real estate.”

Chong’s alleged scam ran from 2008 until December last year when his business was raided by the NBI.

“This went on for 15 years and it has to stop. We are aware of their dealings. We will look at deductions with receipts, and we will see if they are real companies doing real business,” Remulla said of the dummy corporations.

Shared incorporators

BIR Commissioner Romeo Lumagui Jr. has filed a criminal complaint for violating the tax code against three “dummy” firms – Buildforce Trading Inc., Crazykitchen Foodtrade Corp., Decarich Supertrade Inc. and Redington Corp.

The NBI also found that based on incorporation records with the Securities and Exchange Commission, an initial list of 28 suppliers share “interlocking names of incorporators.”

“Each incorporator is also the incorporator of at least two to six other dummy corporations. Apparently, the supplier corporations were organized and being operated by the same group of individuals as shown by their interlocking incorporators,” the NBI complaint read.

At least 31 Brenterprise officials and their alleged accomplices will face a DOJ probe for falsification of commercial documents in relation to cybercrime, fraudulent conduct of business, graft and corrupt practices and printing of fraudulent receipts or commercial invoices under the National Internal Revenue Code.

Aside from Chong, Brenterprise general manager Alaine Margaret Chong, chief accountant Jay Antonio Chua and managers, team leaders and encoders also face charges.

While Chong was earlier cleared by the Court of Appeals in a drug smuggling case before a Manila court involving a P1.8-billion shabu shipment in 2019, he remains a “fugitive from justice” as he has yet to return from abroad, Remulla said.