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(Luxembourg, 21 February 2024) – Over 80 searches were conducted yesterday and three suspects were arrested, in a probe into an alleged criminal organisation suspected of a multimillion VAT fraud involving car sales, led by the European Public Prosecutor’s Office (EPPO) in Cologne and Munich (Germany).
The three individuals, suspected of being the ringleaders of the fraud, were arrested in the south of Munich and in a village close to Dortmund. During the searches, carried out in several locations in Germany (including Munich and Hagen) and Italy, more than 40 high priced vehicles were seized, as well a luxury apartment in the south of Munich. In addition, several bank accounts were frozen, with a value of more than € 1.2 million. Cash in several currencies, as well as luxury watches, jewellery and several luxury bags, were seized in the houses of the suspects. A writing robot – used to print signatures on invoices –, and a weapon, were also found.
At issue are German companies suspected of fraudulently exporting cars – both used and new – from Germany to other EU Member States, using an intra-community 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 (VAT).
According to the evidence, the suspects purchased vehicles on a large scale from various German car dealers, and then used a network of shell companies and forged invoices to simulate that the cars were being sold to other Member States, in order to evade the payment of VAT. There are reasonable grounds to believe that the vehicles were delivered to missing trader companies, often located in Italy. According to the investigation, more than 200 of the companies that appeared on invoices as buyers of the vehicles are in fact missing traders, who do not fulfil their tax obligations in their country. It is also suspected that in some instances, the vehicles were being kept in Germany.
It is understood that the scheme caused an estimated damage of over €70 million in lost VAT in Germany alone.
The investigation counted on the support of Europol, Germany’s Tax Investigation Offices in Munich (Finanzamt München – Steuerfahndungsstelle) and Hagen (Finanzamt für Steuerstrafsachen und Steuerfahndung Hagen), the Police of Hagen and the Italian Financial Police (Guardia di Finanza) in Prato, Tuscany. The searches, carried out simultaneously in Germany and Italy, were conducted by hundreds of officers from the Tax Investigation Offices in Germany, the Bavarian and North Rhine-Westphalian police forces – among them a special police command (SEK) – and the Italian Financial Police.
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.