Tax Evasion and Financial Crime Exposed in Lithuania
Major Operation Unravels Massive Tax Evasion and Financial Crime Network
On February 27, law enforcement agencies across Europe conducted simultaneous raids on 55 locations in Lithuania, resulting in the arrest of 18 individuals, including three main suspects. The operation was a major crackdown on a massive tax evasion and financial crime network operating out of Lithuania.
Investigation Reveals Extensive Money Laundering Operations
The investigation revealed that a financial institution set up by an Italian-based organized criminal group (OCG) in 2016 had been providing money laundering services to thousands of criminals across the EU. The institution, which advertised its services online, was led by two main suspects residing in Lithuania and Latvia.
OCG’s Activities
The OCG laundered millions of euros from various criminal activities, including:
- Tax evasion
- Cyber fraud
- Fake bankruptcy
- Drug trafficking
A significant portion of these funds was injected into the Latvian and Lithuanian economies through the purchase of luxury real estate and vehicles.
Exploitation of Italy’s Building Bonus Scheme
Authorities also discovered that the OCG had exploited Italy’s building bonus scheme, obtaining €15 million in unlawful bonuses for renovation works that never took place. The main perpetrator behind this fraud was a practicing tax consultant who arranged the awarding of these bonuses to 72 individuals aware of the abuse.
International Cooperation and Support
The operation involved the Public Prosecutor’s Offices of Naples and Lecce in Italy, as well as their counterparts in Latvia and Lithuania through Eurojust. In 2022, Lithuanian authorities closed down the electronic payment institution, revoking its banking license and initiating bankruptcy procedures for non-compliance with money laundering regulations.
Eurojust supported the setting up and funding of a joint investigation team between national authorities and coordinated simultaneous actions in three countries. Europol has been supporting the case since January 2022, working closely with national investigators to uncover the magnitude and complexity of the OCG’s activities.
Consequences
The rapid response of Latvian and Lithuanian authorities to suspicious transactions led to the identification and freezing of millions in funds, real estate properties, and luxury vehicles, which can now be confiscated. Two Europol experts were deployed to Latvia during the action day to support investigative measures.
Conclusion
The operation highlights the importance of international cooperation in tackling financial crime and tax evasion. Eurojust Vice-President Margarita Šniutytė- Daugėlienė, National Member for Italy Aldo Ingangi, and National Member for Latvia Dagmāra Skudra jointly stated:
“This collaboration shows the significance of a well-coordinated and prepared approach across Europe. It’s a clear example of Eurojust’s role in transnational judicial cooperation and sends a message to criminal networks that we know no borders either.”