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(Luxembourg, 6 December 2024) – The European Public Prosecutor’s Office (EPPO) in Berlin (Germany) has conducted searches at a bank in Munich in a probe into a possible €200 million VAT fraud. Under investigation is the managing director of a company, who is suspected to have founded the company with the sole purpose of creating a fictitious business identity to process transactions via his company’s bank accounts.
According to the investigation, the suspect received bank transfers totalling over €200 million from 127 different companies in Italy and Slovakia to his accounts in Germany between 2016 and 2022. The money is understood to have originated primarily from 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.
Based on the evidence, as soon as the transfers arrived on his business accounts, the suspect would withdraw substantial sums of up to several hundred thousand euro in cash almost daily. Between 2017 and 2022, one of his bank accounts received payments to the amount of €188 million, nearly all of which was withdrawn in cash to date. In 2021 and 2022 alone, he collected over €80 million in cash.
It is believed that when one bank he was using reported suspicion of money laundering, the suspect switched to the bank that is being searched today.
According to the evidence, the cash was disbursed by bank employees and the payments had been authorised under the relevant internal monitoring obligations – even though the large number of transactions should have triggered suspicion. In this regard, it is currently being evaluated whether the bank carried out the necessary due diligence measures under the Anti-Money Laundering Act.
The EPPO is the independent public prosecution office of the European Union, responsible for investigating, prosecuting, and bringing to judgment crimes against the EU’s financial interests.