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(Luxembourg, 6 November 2024) – The European Public Prosecutor’s Office (EPPO) in Bratislava (Slovakia) has initiated formal proceedings against six members of an organised crime group and two companies, suspected of a €26 million VAT fraud scheme involving cross-border trade in precious metals. The organised crime group first appeared in a previous investigation by the EPPO in Munich (Germany).
According to the investigation, the group used a Bratislava-based business as a buffer company in a cross-border 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.
It is believed that one of the suspected companies, led by one of the suspects as owner and by another as CEO, conducted transactions in precious metals—gold, silver, platinum, and palladium—while evading VAT obligations. Goods were purchased from suppliers in Germany and the UK, and subsequently resold to companies in London, Belgium, and Slovakia without VAT.
The group allegedly manipulated monthly VAT statements by fraudulently declaring VAT-free intra-community supplies, while intentionally omitting VAT due on purchases made within the EU. These falsified statements led to unlawful VAT returns amounting to €28 774.35 and resulted in additional VAT duties of €17 140.34. The Slovak tax authority, upon audit, identified that these falsified VAT deductions ultimately amounted to evaded VAT of €26 564 321.44, including an estimated €265 526.87 in losses to the EU budget.
Four members from this organised group were sentenced by a German court and two suspects currently serve prison sentences in Germany, where they had created VAT losses of at least €23 million with their VAT fraud scheme. Their criminal activities in Slovakia could be identified thanks to the operational model of the EPPO as a single office.
If indicted and convicted, the suspects could face prison sentences between three to ten years in Slovakia.
All suspects are presumed innocent until proven guilty in the competent Slovak courts.
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.