Image
Published on
(Luxembourg, 22 December 2023) – In the context of a large-scale investigation led by the European Public Prosecutor’s Office (EPPO) in Athens (Greece), several house searches, arrests and seizures have taken place, in a probe into an alleged criminal organisation suspected of a €36.4 million VAT fraud and a €9.6 million EU subsidy fraud.
The searches, seizures and arrests were carried out in Greece on 11 December 2023 by the Hellenic Financial Police. Ten people were arrested, and seizures were made of eight luxury cars, several other motor vehicles, a high number of mobile phones and over €50 000 in cash.
On 12 December 2023, charges were pressed by the EPPO against a total of 32 individuals. Of these, the 10 who had already been arrested were brought before the investigative judge of the Athens Court of First Instance, in order to give statements.
On the radar of the EPPO is a suspected criminal organisation, active in the wholesale and retail trade of consumer electronics (mainly mobile phones) since the beginning of 2018.
Starting with VAT fraud
According to the evidence, the suspects under investigation created a complex web of companies based in Greece and other EU Member States (Cyprus and Slovakia), in order to take advantage of EU rules on cross-border transactions between its Member States, as these are exempt from VAT. It is understood that they funnelled intra-community acquisitions into their primary companies – which acted as brokers – while using a chain of missing traders, which would vanish without fulfilling their tax obligations. Other companies within this fraudulent chain would subsequently claim undue VAT reimbursements from the national tax authorities.
The investigation has revealed estimated losses to the EU and national budgets of €36.4 million (€29 million in evaded VAT payments and €7.4 million in undue VAT refunds).
Subsidy fraud during the Covid-19 pandemic
It is also alleged that, between April 2020 and the end of 2021, the suspects used their network of companies to set up 57 new companies, and used them for fictitious transactions. This enabled them to receive financial aid from the Greek State and the EU in the form of a non-refundable advance payment of a total amount of €9 695 525.
These subsidies were intended to help businesses that were financially affected by the spread of Covid-19. According to the evidence, the leaders of the organisation partly transferred the payment to foreign bank accounts, used it to travel and buy luxury goods (e.g. luxury cars), and to finance the maintenance of their criminal infrastructure.
The investigation is ongoing.
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.