European authorities dismantle €114 million cross-border VAT fraud ring

The European Public Prosecutor’s Office (EPPO) in Munich has coordinated a major operation resulting in the arrest of five individuals, including three in Cyprus, suspected of orchestrating a €114 million cross-border VAT fraud scheme. The investigation, which spans across Cyprus, Germany, Italy, and Greece, targeted a criminal network that exploited European Union regulations governing tax-exempt cross-border transactions.

The fraudulent operation involved the sale of smartphones through a network of shell companies based in Germany, Albania, and Sweden. This system generated an estimated tax loss of €80 million in Sweden and €34 million in Germany. Authorities executed 12 search warrants at various residential and business locations, leading to the seizure of bank accounts, vehicles, and real estate, alongside the freezing of assets valued at approximately €80,000.

This criminal network allegedly established and managed the entire fraud infrastructure to evade tax obligations. The ongoing investigation is currently focusing on uncovering further evidence across the involved member states, while the arrested suspects face legal proceedings regarding their roles in the illicit network.