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He said the loss to the state budget was from unpaid value-added tax and customs duty on those cars.

The Customs Police started investigating the case in August 2015. So far the investigators had identified 28 cars but clearly the scheme had been used in smuggling more cars and their total number was yet to be established.

"The cars entered [Latvia] from Russia with Russian vehicle registration certificates. In Latvia, they were issued temporary registration plates valid for a month. During that month, documents were created, showing that the cars had been purchased from a fictitious German company,” Podins said. Afterwards the cars were sold mostly in Germany.

Two Latvian companies later re-registered in the name of foreign individuals were involved in the contraband scheme.

So far 11 searches were carried out as part of the criminal proceedings, and there are seven suspects, including three employees of the Latvian Road Traffic Safety Directorate (CSDD).

The Latvian state has incurred huge loss from the scheme under which cars from Russia were registered in Latvia based on fake documents, the Customs Police chief said, adding that the total loss would be determined upon completion of the investigation.

The public Latvian Television (LTV) reported last Saturday that three employees of the Latvian Road Traffic Safety Directorate (CSDD) have been questioned in relation to the luxury car contraband scheme uncovered by the Customs Police. CSDD representative Janis Aizpors told LTV that, in opinion of the CSDD, the car registration process had been fully legitimate and its employees, who had acted based on the documents presented to them, had not violated any laws or regulations.

Previously LTV reported that the Customs Police under the Latvian State Revenue Service had uncovered a major contraband scheme involving luxury cars from Russia, and CSSD officials might have helped to cover up the illegalities.

Luxury cars such as Ferrari, Range Rover and others were driven into Latvia from Russia, crossing the border on own wheels, not in car carrier trailers. They got temporary registration and were sold afterwards. LTV said that the CSDD officials, when registering the vehicles that already had the Latvian registration plates, had turned a blind eye to the fact that the cars had originally been brought here from Russia and were subject to the import duty.

As a result, hundreds of thousands of euros did not get paid into the Latvian budget, and the legalized cars became vehicles of the EU origin that could be sold freely in other countries, LTV said. 

Latvian Transport Minister Uldis Augulis (Greens/Farmers) has ordered the Road Traffic Safety Directorate (CSDD) to supply him with information about the internal probe started in the organization in relation to the luxury car contraband scheme uncovered by the Customs Police and possible involvement of the CSDD officials in the scheme, the Transport Ministry said.

CSDD is a state-owned company registering motor vehicles in Latvia, issuing driving licenses and conducting road worthiness examinations of vehicles.