European Public Prosecutor’s Office (EPPO) and Law Enforcement Agencies Arrest Seven Suspects for VAT Fraud Worth €13 Million

In a joint operation, the European Public Prosecutor’s Office (EPPO), Belgian, and Dutch law enforcement agencies arrested seven Belgian nationals in the Netherlands on charges of VAT fraud worth €13 million.

The Fraud

According to the EPPO’s investigation, named ‘Kingdom’, the Belgian subsidiary of a Dutch company, under false pretences, requested a €13.7 million VAT refund from the Belgian Treasury. The Belgian authorities discovered that the company had not traded any actual goods, and the requested refund was paid into the accounts of the suspects.

One of the banks involved in the transaction, on suspicion of fraud, returned €3.7 million to the treasury.

The Dutch company, which was a ‘missing trader’ used exclusively for fraudulent VAT refunds, was already under investigation in the Netherlands for similar offenses. The suspects had extended their activities to Belgium to evade detection.

The Scheme

The first fraudulent refund worth €13 million was followed by another attempt to replicate the scheme with a Belgian branch of another Dutch company controlled by the suspects. The suspects attempted to claim over €4 million, but the payment was withheld due to suspicions.

The Ill-Gotten Gains

A significant portion of the illicit gains was transferred to the United Arab Emirates, while the rest was used to purchase luxury cars, high-end goods, and for gambling in casinos.

Raids and Seizures

During raids on 23 May 2024, law enforcement officers searched premises linked to the suspects in the Netherlands and seized luxury goods worth more than €200,000, €7,000 in cash, and a car. Searches were also carried out in the Netherlands with the support of the Dutch Fiscal Information and Investigation Service (FIOD), the Dutch Public Prosecutor’s Office, and the Belgian Federal Police’s Central Unit for Economic Crime.

Previous Investigation and Asset Seizure

In a previous Dutch investigation into the same suspects for money laundering, the FIOD and the Dutch Public Prosecutor’s office had seized assets worth €715,000, including two Porsches, one Lamborghini, and four bank accounts. These assets have now been seized in the EPPO investigation as compensation for the damages caused.

All suspects are considered innocent until proven guilty in the Belgian courts of law. The EPPO is the independent public prosecution office of the European Union, responsible for investigating, prosecuting, and bringing to judgment crimes against the financial interests of the EU.