Europol supports EPPO-led investigation into EUR 520 million VAT fraud involving mafia networks

Europol has supported the European Public Prosecutor’s Office (EPPO) in a major cross-border operation against VAT fraud, dubbed ‘Moby Dick’. The operation has resulted in detention orders being executed against 43 suspects linked to a criminal enterprise of an estimated value of EUR 520 million. 

The investigation, led by the EPPO offices in Milan and Palermo, targeted an organised crime network spanning multiple EU Member States and non-EU countries.

Pan-European action day

The action day mobilised law enforcement across Europe with 160 searches carried out in more than 10 countries. Investigative measures are ongoing in several EU countries, including Bulgaria, Croatia, Cyprus, Czechia, Italy, Luxembourg, the Netherlands, Slovakia, Spain, as well as in non-EU countries.

A total of 200 individuals are being investigated, with more than 400 companies involved.

A freezing order of over €520 million is in execution to compensate the damage to the EU and the national budgets. In Italy alone, 129 bank accounts are being frozen, and 192 real estate properties have been seized, together with 44 luxury cars and boats. 

Mafia connections and money laundering

The suspects are believed to have orchestrated a sophisticated value added tax (VAT) carousel fraud, primarily involving electronic goods such as wireless earphones and laptops.

A number of the suspects have links to several mafia clans. Mafia methods also seem to have been used to settle conflicts that arose within the criminal syndicate between the members of the different criminal organisations.    

VAT carousel fraud takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from VAT. Based on the evidence gathered by law enforcement, the suspects established companies in Italy and other EU Member States, as well as in non-EU countries. This enabled them to trade the goods through a fraudulent chain of missing traders – who would then vanish without fulfilling their tax obligations. Other companies in the fraudulent chain would subsequently claim VAT reimbursements from the national tax authorities.

The investigation was conducted by the Italian Financial Police of Varese (Guardia di Finanza di Varese) and the Italian State Police (Squadra Mobile di Palermo and Servizio Centrale Operativo), under the supervision of the EPPO. The Italian Financial Police of Milano and Palermo also contributed to the investigation.

International law enforcement cooperation

In support of the EPPO in its investigation and action day, Europol provided a range of operational services. The Agency conducted comprehensive analytical support, cross-referencing the dataset to help identify connections. Europol also facilitated access to Passenger Name Record (PNR) information on more than 45 targeted individuals to enhance travel intelligence.

To support real-time coordination on the ground, Europol set up a Virtual Command Post (VCP) to coordinate the field officers conducting the searches. A Europol specialist was deployed to the Operations Command Centre in Palermo, equipped with a mobile office to conduct crosschecks and manage VCP communications throughout the operation. Europol further coordinated with the European Network of Fugitive Active Search Teams (ENFAST) to aid in locating suspects targeted for arrest.

The action day was carried out in the framework of the European Multidisciplinary Platform Against Criminal Threats. 
List of the main national authorities involved:

• Italian Financial Guard (Guardia di Finanza)
• Italian State Police (Polizia di Stato) 
• Spanish National Police (Policía Nacional)
• Czechia Police (Policie České republiky)
• Luxembourg Judicial Police Service (Service de Police judiciaire)
• Slovakia Police Corps (Policajný zbor) 
• The Fiscal Information and Investigation Service of the Netherlands (FIOD)
• Bulgaria National Investigation Service 
• Croatia Police (Ministarstvo unutarnjih poslova)