European Public Prosecutor's Office busts 115 million euro VAT fraud network

The European Public Prosecutor's Office (EPPO) in Munich has dismantled an international criminal network involved in a major cross-border VAT fraud scheme totaling approximately 115.5 million euros. The operation, which involved coordinated actions across Cyprus, Germany, Italy, and Greece, resulted in five arrests, including three individuals apprehended in Cyprus. Authorities conducted 12 searches of residential and business premises as part of the investigation into the illicit network.

According to the EPPO, the criminal organization utilized a complex circular fraud scheme by exploiting EU regulations on cross-border transactions, which are often exempt from VAT under specific conditions. Smartphones were sold through shell companies based in Germany, Albania, and Sweden to facilitate tax evasion. The total estimated tax loss includes approximately 80.8 million euros linked to transactions in Sweden between 2019 and 2020, and 34.6 million euros in Germany. Financial records indicate that proceeds were moved through various digital financial platforms.

While some sources report the total fraud at 114 million euros, others specify a more precise figure of 115,529,455 euros. The investigation into the network, which allegedly involved four Cypriot businessmen and various shell companies, is ongoing as authorities analyze seized assets and transaction records to determine further criminal liabilities.