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EPPO Uncovers Massive VAT Fraud Scheme: 12 Suspects and 15 Companies Accused

Luxembourg, December 6, 2023 - The European Public Prosecutor’s Office (EPPO) today issued charges against 12 suspects and 15 companies in the wake of a massive intra-Community Value Added Tax (VAT) fraud scheme dubbed “Admiral”.

The Accused Individuals

  • 10 Portuguese nationals
  • 2 French nationals

The accused individuals are suspected of creating and operating a criminal association that sold electronic goods between 2016 and November 2022, committing numerous qualified tax fraud crimes, money laundering, and active and passive corruption in the private sector. Five of the accused are currently in custody, with one under house arrest.

The Accused Companies

  • 14 Portuguese-registered companies
  • 1 Cypriot-registered company

According to the indictment, the suspects allegedly used a chain of companies to evade VAT payments, using fake invoices and fraudulent tax declarations. The scheme took advantage of EU rules on cross-border transactions between Member States exempt from value-added tax.

Money Laundering and Investment in Luxury Goods

  • Channeled illegal profits into bank accounts in third countries
  • Invested in the real estate sector and luxury goods in the EU to conceal the criminal origin of their profits, accumulating personal wealth
  • Collaborated with a private banking manager (also charged) to circumvent anti-money laundering measures

Potential Consequences

  • If found guilty, the accused individuals face potential prison sentences up to 25 years
  • The companies accused are liable for fines or dissolution

Estimated Losses

  • Estimated losses exceeding €80 million in Portugal
  • Losses to the EU and national budgets of affected countries could reach €2.2 billion

Tentacled Organised Crime Network

The charges follow a coordinated investigation by the EPPO, which involved 22 European Public Prosecutors delegated from the EPPO’s central office. The prosecutors designed and implemented a common investigative approach to tackle an organized crime network, without which such an investigation would not have been possible.

Ongoing Investigation

  • The suspects continue to be investigated in autonomous processes in Portugal and other countries.

EPPO: A Independent EU Agency

The European Public Prosecutor’s Office is an independent agency of the European Union. It is responsible for conducting criminal proceedings, investigations, and trials against crimes that harm the EU’s financial interests.