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. Last Updated: 07/27/2016

Confiscated Goods Turn Tidy Profit

Vladimir Lipov's store offers an incredible range of merchandise at knock-down prices. Its turnover has mushroomed many times since opening for business just a couple months ago. And it has no shortage of wholesale suppliers.

Nedoimka, loosely translated as "Arrears," is a joint venture between Lipov's retailing company Splav and an unlikely partner: the Moscow branch of the State Tax Police. Its wares are whatever the authorities can confiscate from tax dodgers -- from rusty screws to three-piece suits to computers and automobiles. No returns or guarantees, but there are plenty of bargains.

"Any pensioner can come visit Nedoimka and put the idea of social justice into action by purchasing some cheap good that recently belonged to a dishonest businessman who broke the law," Lipov said during a recent interview at the warehouse at 49 Leninsky Prospekt.

But beyond being a crusader for justice, Lipov sees his mission as part law enforcer, part entrepreneurial capitalist.

"Since we opened the store, any businessman will think 100 times about whether or not to evade paying taxes, knowing that the tax police can come anytime and take his computer and his tea-pot and take his wheelchair right out from under him," Lipov said.

Meanwhile, the store is turning a tidy profit. On a typical day, customers start lining up at 7:30 a.m. and more than 500 walk out with something under their arm before the day is through. Revenue has grown from 4.5 million rubles ($850) in its first month to a whopping 20 million rubles a day now.

Of that amount, a 15 percent cut goes to Lipov's company, which started out four years ago by selling cigarette lighters and Snickers bars before moving, just over two months ago, into selling confiscated property. The rest goes to the federal budget.

The authorities have a bountiful harvest to reap. In the first half of the year more than 1.7 trillion rubles worth of property was impounded, with 222.8 billion rubles so far transferred to state coffers. Tax police are making arrests at five to six firms a week, said Alexander Avramenko of the arrest operations department.

Avramenko said the money raised through selling confiscated assets provides a boost for cash-poor city authorities. But he stressed that the practice didn't let any felons off the hook.

"Selling out such property does not exclude criminal responsibility," he said. "Covering a firm's arrears is not a mitigating circumstance. You can still be put in jail afterwards."

All of the items are assessed by representatives of the independent companies Mosexpertiza and Sever, who noisily bustle around the warehouse slapping price tags on goods laid out on long metal shelves.

Inside the spacious store, babushkas buy backpacks for their grandchildren, housewives critically examine cheap fax machines and New Russians congregate in the corner that features cordless telephones and leather shoes.

"I'm extremely pleased, very cheap stuff," said Nikolai, 37, who after a 20-minute search purchased four pairs of velvet pants and a shirt -- all for 50,000 rubles. "Next time I'll come here with my wife -- if the pants suit me fine."

On one recent afternoon, buyers snapped up a well-used Everest brand personal computer for just 380,000 rubles. A fancier model, the Hyundai 286, went for 787,500 rubles; when that sold out, the racks were filled with 19 pairs of women's high-top boots at 15,750 rubles each.

The merchandise, of course, is in what-you-see-is-what-you-get condition. And it's not always a pretty sight. The two cars offered for sale were old, disassembled Moskvich two-seaters lying in the back yard.

The most profitable trading deals are made outside the store.

"No doubt, sometimes we make bigger money on selling large quantities all at once," Lipov said.

Buyers, though, often have the last laugh, reselling the goods they buy at higher prices at a nearby flea market.

Officials emphasize that confiscation is a tame process.

"We work using civilized methods, with no violence against commercial structures," said Oleg Mikhailov, a spokesman for the Moscow tax police.

Lipov sees a bright future for his store and others like it. "We have many people visiting us to learn from our experience," he said, saying executives from Lipetsk and other Russian cities also aspire to set up similar centers.

Managers are now debating whether to install a computer network to share ideas with regional authorities.

Nedoimka had sought to open its own car sales and repair service, but was prevented by law since many of the vehicles in their hands lack proper registration. So instead of fighting a turf war with their fellow law-enforcers, the GAI traffic police, the tax police are hoping to share their business wisdom.

"The traffic police also confiscate a lot of stuff, but separately from us, so we thought why don't we tie them to our business?" explained Lipov.

But a secretary at the GAI office reached Friday afternoon said the traffic police do not confiscate any vehicles.