Suspected ringleader arrested in EUR 85 million VAT fraud scheme

Europol has supported an action across eight countries which targeted criminal groups under investigation for VAT fraud amounting to EUR 85 million. 

On 22 November, 59 searches were carried out, resulting in the arrest of one of the alleged ringleaders. 

Seizures included:

• a total of 1 800 AirPods;
• cash and two luxury cars (a Lamborghini and a Porsche), worth a collective EUR 550 000;
• a luxury watch, worth EUR 907 000;
• a jammer – used to scramble communications and to avoid detection by the Police – was also confiscated.

Code-named ‘Goliath’, the investigation was led by the European Public Prosecutor’s Office (EPPO) in Hamburg, Germany, with the support of Europol and law enforcement authorities in Denmark, France, Germany, Hungary, Lithuania, the Netherlands, Sweden and Switzerland. 

The investigation focused on the suspected members of two criminal organisations, active in the international trade of consumer electronics (mainly AirPods). They are believed to have evaded tax by means of a VAT carousel fraud – a complex criminal scheme that takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value-added tax. The estimated loss to the EU and national budgets amounts to at least EUR 85 million.

The investigators were able to uncover how the suspects established companies in Germany and other EU Member States, as well as in non-EU countries, in order to trade the goods through a fraudulent chain of missing traders – who would vanish without fulfilling their tax obligations. Other companies in the fraudulent chain would subsequently claim VAT reimbursements from the national tax authorities.

The investigative work conducted by the EPPO, with the support of Europol, established connections between the suspects and the numerous companies used in the fraudulent schemes.  

During the action day, Europol deployed one of its specialists to the coordination centre in Luxembourg to facilitate the information exchange and crosscheck against its databases the data gathered during the house searches.

Participating authorities: 

• Europol
• German tax investigation units: Steuerfahndung Nürnberg, Steuerfahndung Hamburg, Steuerfahndung Oldenburg, Steuerfahndung Braunschweig, Steuerfahndung Konstanz
• German criminal police investigation units: Landeskriminalamt Düsseldorf, Polizeipräsidium Dortmund and Polizeipräsidium Düsseldorf
• Hungary: Budapest’s Metropolitan Chief Public Prosecutor’s Office and the National Tax and Customs Administration
• French Customs: Douane – Finances 
• Denmark: Rigsadvokaten (Director of Public Prosecutions), Københavns Politi (Copenhagen Police) and Funen Police
• Switzerland: Public Prosecutor’s Office of Kanton Thurgau 
• Sweden: Ekobrottsmyndigheten (Swedish Economic Crime Authority) 
• Other law enforcement authorities in Lithuania, The Netherlands and Switzerland.