European Public Prosecutor’s Office Files Indictment against Eight Suspects for €80 Million VAT Fraud

(Berlin, 27 July 2023) - The European Public Prosecutor’s Office (EPPO) in Berlin, Germany, has filed an indictment against eight suspects for their involvement in a complex VAT fraud scheme worth around €80 million.

Charges and Suspects

• Four suspects are charged with orchestrating this crime as members of an organized criminal group, including the suspected ring leader.
• One suspect is charged with aiding and abetting.
• Two more are accused of money laundering activities.
• A notary is charged with forgery and false notarization.

Complex Scheme Unveiled

The investigation, conducted by the EPPO and German tax enforcement authorities, uncovered a labyrinth of shell companies used to trade luxury cars and medical face masks in several countries. The suspects allegedly enlisted individuals in financial distress from Poland and Latvia as straw men and acted as factual managing directors of several companies by forging signatures. A Polish currency exchange company served as a front to launder and share profits.

VAT Fraud Techniques

The VAT fraud involved the sale of high-priced vehicles through missing trader companies that did not meet their tax obligations. Parallel chains of fake invoices and carousel transactions were used without paying the VAT to the national tax authorities. The criminal scheme profited from EU rules on cross-border transactions, which are exempt from VAT.

Preceding Investigative Actions

The initial stages of this investigation saw German tax enforcement authorities conducting searches and arresting two suspects at the request of the EPPO. The ringleader was later identified and arrested following an European Arrest Warrant issued by the EPPO.

Seized Assets

As part of the operation, bank accounts were frozen, and assets worth an estimated €5.2 million were seized in Croatia, the Czech Republic, France, Germany, and Poland. Besides the suspects, two individuals and three companies were targeted as asset seizure defendants, believed to have received illicit profits worth €7.75 million.

Effective Collaborations

The success of this operation was largely due to the fruitful cooperation with the Berlin Public Prosecutor’s Office, which is investigating other crimes committed by the alleged criminal organization outside the EPPO’s jurisdiction.

About the European Public Prosecutor’s Office

The European Public Prosecutor’s Office (EPPO) is the EU’s independent public prosecution entity responsible for investigating, prosecuting, and bringing to justice crimes against the EU’s financial interests.