During 1994 only 1,500 tax offenses were filed in court, of which only 20 cases were considered as criminal and only 10 saw sentences pronounced. In 1995, of 4,229 tax evasion cases, 1,611 were considered criminal and 312 evaders were sent to court.) There is a crucial difference between the "second" economy and economic crime. The "second" economy is a productive sector guilty of one main crime—tax evasion; economic crime is only a redistributor of wealth.Crime Then and NowIn the Soviet Union theft of socialist property, corruption, and illegal hard currency operations were the major economic crimes. Large-scale theft of socialist property and massive fraud involving hard currency could be, and were, punished by death. (William A. Clark analyzed trials of Soviet government officials and enterprise managers charged with economic crimes, as reported by the Soviet press between 1965 and 1990. Of the 849 officials tried, about 500 received jail sentences, with an average of eleven years jail for embezzling public property and eight for bribery. Thirty-two persons were sentenced to be executed.) In 1994, particularly, the Russian public discovered how much damage can be done by investment fraud and pyramids. Since the collapse of the Soviet Union new business rules, including the opportunity to establish limited liability companies, have opened a wide gate for fraud and other "market type" economic, white-collar crimes. Crime has become a highly profitable business in Russia. From an international perspective, the Russian criminal economy is extremely efficient. The sudden explosion of economic crimes has caught the Russian public and the government off guard. According to some estimates, the 1994 worldwide average per capita income from economic crime reached $100. The corresponding figure for Russia, however, was $130, assuming 38.4 trillion rubles in annual crime-related income (box 1). In Ukraine revenue from the infamous black e...
