Investigation Goliath: EPPO targets international ring suspected of €85 million VAT fraud

(Luxembourg, 27 November 2023) – On 22 November 2023, 59 searches and other investigative measures were carried out in eight countries, in an action targeting criminal groups under investigation for an €85 million VAT fraud, led by the European Public Prosecutor’s Office (EPPO) in Hamburg (Germany). One of the alleged ringleaders of the criminal groups under investigation was arrested.

Code-named ‘Goliath’, the investigation, which counted on the support of Europol, German tax agencies and several national police forces, stretches across Denmark, France, Germany, Hungary, Lithuania, the Netherlands, Sweden and Switzerland.

During the searches, 1.800 AirPods were seized, as well as cash, two luxury cars (a Lamborghini and a Porsche), worth a collective €550 000, and a luxury watch, worth €907 000. A jammer – used to scramble communications and to avoid detection by the Police – was also confiscated. 

On the radar of the EPPO are suspected members of a criminal organisation, active in the international trade of consumer electronics (mainly AirPods). They are suspected of evading tax by means of 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 –, with estimated losses to the EU and national budgets of at least €85 million.

According to the investigation, the suspects established companies in Germany and other EU Member States, as well as in non-EU countries, in order to trade the goods through a fraudulent chain of missing traders – who would vanish without fulfilling their tax obligations. Other companies in the fraudulent chain would subsequently claim VAT reimbursements from the national tax authorities.

The investigative work conducted by the EPPO established connections between the suspects and the numerous companies used in the fraudulent schemes. 

According to the evidence, the actual manager of a German company is understood to be an accomplice of the main suspects. There are reasonable grounds to believe that he owns a company in Dortmund for money laundering purposes, connected to a Hungarian company, also under investigation for tax evasion. There is evidence that the Hungarian company is in fact storing and selling the goods in Germany, as part of a separate VAT fraud scheme, which is under investigation within Goliath too.

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: 

• Europol
• German tax investigation units: Steuerfahndung Nürnberg, Steuerfahndung Hamburg, Steuerfahndung Oldenburg, Steuerfahndung Braunschweig, Steuerfahndung Konstanz
• German criminal police investigation units: Landeskriminalamt Düsseldorf, Polizeipräsidium Dortmund and Polizeipräsidium Düsseldorf
• Hungary: Budapest’s Metropolitan Chief Public Prosecutor’s Office and the National Tax and Customs Administration
• French Customs: Douane – Finances
• Denmark: Rigsadvokaten (Director of Public Prosecutions), Københavns Politi (Copenhagen Police) and Funen Police
• Switzerland: Public Prosecutor’s Office of Kanton Thurgau 
• Sweden: Ekobrottsmyndigheten (Swedish Economic Crime Authority)
• Other law enforcement authorities in Lithuania, The Netherlands and Switzerland