Financial Crime World

Title: Belgian-Dutch VAT Fraud Ring: Seven Arrested in ‘Kingdom’ Probe worth €13 million

Overview

In a major development for the European Public Prosecutor’s Office (EPPO), an ongoing cross-border investigation, codenamed ‘Kingdom’, led to the arrest of seven suspects in the Netherlands in May 2024, as part of an €13 million VAT fraud scheme.

Arrests and Fraud Allegations

  • Seven individuals were arrested in the Netherlands for their involvement in a VAT refund fraud scheme.
  • The case involved a Belgian subsidiary of a Dutch company submitting a false €13.7 million VAT refund claim to the Belgian Treasury.
  • Suspects allegedly provided fabricated invoices and false VAT declarations, without trading any goods.

Investigation Details

  • Belgian authorities unknowingly paid €10.3 million to various accounts linked to the suspects.
  • A Belgian bank noticed discrepancies and returned over €3.7 million to the treasury.
  • The ‘missing trader’ company, known for facilitating fraudulent tax refunds under EU rules, had submitted unlawful claims to the Belgian tax authorities.

Criminal Background

  • Some of the suspects had previously faced similar charges in the Netherlands.
  • They reportedly expanded their criminal activities to Belgium after the successful first VAT refund claim.
  • The second attempt was thwarted when authorities grew suspicious.

Seizures and Assets

  • Large portions of the illicit gains were transferred to the United Arab Emirates.
  • Seizures worth over €200,000, €7,000 in cash, and a single vehicle were made during multiple search operations.

Collaboration Between Agencies

  • Belgian and Dutch law enforcement agencies collaborated on the investigation.
  • Belgian Federal Police’s Central Unit for Economic Crime (CDGEFID/OCDEFO), the Dutch Fiscal Information and Investigation Service (FIOD), and the Dutch Public Prosecutor’s Office for Serious Fraud, Environmental Crime and Asset Confiscation (Functioneel Parket) executed search warrants in the Netherlands.

Previous Investigations and Assets Seizures

  • Previous national investigations into money laundering involving some of the suspects resulted in:
    • The seizure of Porsches, a Lamborghini, and four bank accounts holding €671,000.
    • These assets, now confiscated, were believed to have been acquired using part of the illegal VAT refund obtained from the Belgian Treasury.

European Public Prosecutor’s Office (EPPO)

  • The EPPO is the European Union’s independent public prosecution office dedicated to investigating, prosecuting, and bringing to judgment crimes targeting the EU’s financial interests.

Assumption of Innocence

  • All individuals implicated in the fraud allegations are assumed innocent until proven guilty in the Belgian courts of law.