One of the six people currently being held in Reykjavik for large scale tax fraud worth ISK 300 million (USD 2.5 million) is an employee of the national tax authority.
The case centres on two limited companies which are registered to five of the six in custody. The companies had the money paid out from the state in so-called input VAT due to the construction of two new buildings. The buildings were, however, never erected and the two companies appear to have never been engaged in any business activities at all.
The tax authority employee is implicated in the case because he received all paperwork from the companies and input them into the system and no neutral tax worker would presumably have done so without asking some pressing questions.
Police have conducted ten house searches as part of the case and the Reykjavik District Court remand the six people in custody for one or two weeks each before trial.