Financial Crime World

Europol Arrests 14 Suspects in 195 Million Euro VAT Fraud Case Involving Austrian Nationals

European Public Prosecutor’s Office (EPPO) in collaboration with law enforcement agencies in Munich and Cologne dismantled a suspected criminal organization involved in a massive Value Added Tax (VAT) fraud worth 195 million euros. The operation, which took place between April 1-2, 2024, in 17 European countries, resulted in the arrest of 14 individuals, including two Austrian citizens.

  • International operation: The European-wide arrests and searches were part of a larger operation involving 680 investigators targeting over 130 locations across Europe.

Austria’s Role

The Austrian Tax Fraud Investigation Unit participated in the operation, carrying out seven searches at various locations in Austria. During these searches, around 200,000 euros in cash, numerous valuables, 166 iPhones and 45 other smartphones in their original packaging, documents, and data carriers containing crucial evidence were seized.

  • Additional arrest: An additional arrest warrant was issued for a German citizen who is a suspect in this case but was located in Austria. The suspect is currently in custody, pending extradition.

Evidence Secured

The operation aimed to secure evidence and make arrests in relation to a VAT missing-trader fraud allegedly committed by a German conduit company. The criminal organization is believed to have carried out fraudulent activities around small electronic goods such as smartphones since 2017.

  • Using the coronavirus pandemic: In addition to activities related to electronic appliances, the same group is also believed to have entered the market for protective masks in 2020 and sought to profit illegally from the coronavirus pandemic.
  • Complex network: The suspected criminals used a complex network of traders, who are believed to have disappeared without fulfilling their tax obligations, leading to the evasion of VAT.
  • Concealing illegal activities: The European Public Prosecutor’s Office states that the suspected criminal organization created a series of letterbox companies, straw men, fictitious identities, and secret communication channels to conceal their illegal activities.

Minister of Finance’s Statement

Minister of Finance Magnus Brunner expressed his appreciation for the collaborative efforts of the law enforcement agencies involved. He stated, “The fight against cross-border tax evasion and VAT fraud only works through well-coordinated international actions. We are pleased with the successful outcome of this operation, which put an end to the criminal activities.”

  • Future indictments: The detailed examination of the evidence secured during the operation will serve as the basis for future indictments in this case.
  • Performance report: Further details on recent successes of the Austrian Tax Fraud Investigation Unit will be presented by Minister of Finance Magnus Brunner and the Unit during their performance report for 2023 on May 6, 2024.