Financial Crime World

Seven Suspects Arrested in Netherlands for €13M VAT Fraud Scheme in Belgium

(Brussels, 24 May 2024)

The European Public Prosecutor’s Office (EPPO) in Brussels, Belgium, in collaboration with Dutch authorities, uncovered a €13 million Value Added Tax (VAT) fraud involving seven Dutch suspects.

Investigation: ‘Kingdom’ VAT Refund Scam

  • The Belgian subsidiary of a Dutch firm requested a VAT refund of €13.7 million from the Belgian Treasury.
  • The suspects claimed fraudulent transactions and declarations, resulting in the payment of €10 million to various bank accounts.
  • One bank identified potential fraud and returned €3.7 million to the Treasury.

Alleged Criminal Activities

The EPPO investigation, named ‘Kingdom’, asserts the following:

  1. The Belgian subsidiary’s VAT refund claim was unlawful due to fake invoices and fraudulent VAT declarations with no actual transactions taking place.
  2. The Dutch company, a ‘missing trader,’ exploited EU regulations on cross-border transactions and was previously identified by Dutch authorities.
  3. Four million euros were attempted to be refunded from the Belgian branch of another Dutch company they controlled, but no payment was issued.
  4. Proceeds of the fraud were transferred to the United Arab Emirates and used to purchase luxury goods, cars, and gamble at casinos.

Coordinated Raids

  • On 23 May 2024, law enforcement officers from Dutch and Belgian authorities raided companies and residences connected to the suspects.
  • Over 97 officers participated, including the Dutch Fiscal Information and Investigation Service (FIOD), the Dutch Public Prosecutor’s Office for Serious Fraud, Environmental Crime and Asset Confiscation (Functioneel Parket), and the Belgian Federal Police’s Central Unit for Economic Crime (CDGEFID/OCDEFO).

Seized Assets

Initial investigations led to the confiscation of:

  1. €200,000 worth of luxury goods.
  2. €7,000 in cash.
  3. A car.

Background

  • In a previous Dutch investigation into money laundering, Dutch authorities seized assets worth a combined €671,000, including luxury vehicles – a Porsche and a Lamborghini – and bank accounts.
  • All suspects are presumed innocent until proven guilty by Belgian courts of law.

European Public Prosecutor’s Office

The EPPO serves as the independent public prosecution office of the European Union, responsible for probing, prosecuting, and bringing charges against crimes that harm the EU’s financial interests.