(Luxembourg, 24 October 2025) – At the request of the European Public Prosecutor’s Office (EPPO) in Munich (Germany), seven suspects have been arrested, and over 100 searches were carried out in seven countries, in an investigation into organised VAT fraud involving small electronic goods. They are suspected of defrauding €48 million in VAT.
The investigation, code-named Mela, stretches across Czechia, Germany, Hungary, Ireland, Italy, the Netherlands, Romania, Spain and the United Kingdom. During the searches, carried out by over 300 tax investigation and police officers, a large number of documents, electronic devices and evidence were seized, as well as cash, mobile phones, jewellery, cars, watches and gold worth €4 million.
At issue is a suspected criminal scheme whereby shell companies, based in several EU Member States and the United Kingdom, fraudulently applied a reduced VAT scheme to the sale of electronic goods since 2018, to illicitly increase their profits.
According to the investigation, new mobile phones and other small electronic goods were sold under the so-called ‘margin taxation’ scheme to end customers and between the shell companies. This means that the reseller only has to pay VAT on the profit margin they make (the difference between the price paid for the item and the price for which it is sold), and not on the full sale price of the item. Usually, this taxation scheme is only applied to resold goods on which VAT had been paid already, whereas in this case, it is believed that new products were sold, solely on paper and only in terms of taxes, as if they were resold goods. Therefore, the goods could be sold at a lower market price, causing unfair competition and a loss of €48 million in VAT.
Evidence-gathering and asset freezing activities were carried out in Austria, Belgium, Czechia, Germany, Hungary, Ireland, Italy, Lithuania, Luxembourg, the Netherlands, Romania, Spain and the United Kingdom and the seven suspects were arrested in Germany, Spain and the Netherlands.
Europol set up a Virtual Command Post (VCP) to coordinate the field officers conducting the searches and a Europol specialist was deployed in Nuremberg, equipped with a mobile office to conduct crosschecks and manage VCP communications.
All persons are presumed innocent until proven guilty in the competent German courts of law.
The EPPO is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting, and bringing to judgment crimes against the financial interests of the EU.
List of main partners and national authorities involved in the action:
- Europol
- Czechia: National Organised Crime Agency (NCOZ - Národní centrála proti organizovanému zločinu)
- Germany: Criminal Police Inspectorate of Lower Franconia with the Bavarian Special Operations Support Unit (KPI(Z) Unterfranken mit Unterstützungskräften USK), police department Ludwigshafen (Polizeidirektion Ludwigshafen), Tax investigation offices of Nuremberg, Mainz and Neustadt (Steuerfahndungen Nürnberg, Mainz und Neustadt), State Office for Combating Financial Crime North Rhine-Westphalia (Landesamt zur Bekämpfung der Finanzkriminalität NRW)
- Italy: Financial Police (Guardia di Finanza)
- Romania: Romania’s Directorate for Combating Organised Crime (Direcţia de Combatere a Criminalităţii Organizate)
- Spain: Civil Guard (Guardia Civil)