The representative of the (French) national financial prosecutor's office (PNF) has demanded a fine of 5 million euros against each of the "Siamese" companies Lycamobile France and Lycamobile Services, including a "display of the conviction on the door of each reseller" of the brand. The lawyers of the companies and their managers have denied any offense.
"We have a group and its leaders who blithely exceed the limits of legality and commit offenses that are very damaging to public finances," he said.
Against the former British CEO of the group Christopher Tooley, suspected of complicity in VAT fraud, he requested two years of imprisonment including one year firm and a fine of 600,000 euros.
The magistrate asked for the same prison sentence for VAT fraud in an organized manner against Andrew England, according to him "straw manager" of Lycamobile Services (LMS), with a fine of 250,000 euros.
For the former director general of LMS, Alain Jochimek, described as a "keystone of the system", three years in prison including two years firm and 600,000 euros fine were requested.
In addition, for the three men, a five-year ban from running a business was requested.
Eight other people, suspected of having played roles to varying degrees in the alleged money-laundering scheme, were also on trial.
François-Xavier Dulin requested sentences ranging from six months in prison suspended to two years firm, most accompanied by fines between 8,000 and 50,000 euros.
"Everyone had their role and everyone benefited from the situation," he said.
The State's lawyer, a civil party, claimed 7.9 million euros in damages for his financial loss concerning VAT fraud.
In his indictment, the financial prosecutor first argued that Lycamobile had misused a legal regime derogating from VAT (value added tax), set up in 2012 by the French Parliament in the telephony sector.
"This regime had to be applied, but until the end, and all the difficulty is there," said the prosecutor, castigating an "insincere invoicing" of LMS and the absence of "minimal verification" of the real activity of the companies to which it sold cards, "filter" companies that were actually empty shells.
For the PNF magistrate, this allowed Lycamobile Services to request VAT refunds from the State while "capturing considerable market share" by selling its products "tax-free".
LMS specialized in the "ethnic market" of Maghreb, African and Indo-Pakistani communities wishing to call abroad.
At the same time, there was for the prosecutor a mechanism of laundering with the "conversion of telephone cards into cash".
According to the prosecution, a system involved these same "filter" companies as well as two Lycamobile salespeople, who sold cash cards and refills to shops in the district of La Chapelle, in the north of Paris.
This allowed construction companies to recover cash in order to illegally remunerate their employees or managers.
For the financial prosecutor, the companies Lycamobile and Alain Jochimek looked at this system with a "more than benevolent eye", and this "because there was a need to make figures". They "wished to invest in a brutal way the market of mobile phone recharges by circumventing the French law," taunted the magistrate.
During the trial, the managers and their counsel fought to argue that this fraud had been set up without their knowledge. They also affirmed their good faith by saying that they had applied a "compulsory" VAT regime whose rules they assured they had respected.