(Luxembourg, 7 October 2026) – The European Public Prosecutor’s Office (EPPO) has conducted searches in eight countries and detained 62 suspects in a probe against criminal organisations suspected of operating a carousel VAT fraud selling mobile phones and electronic devices. The criminal scheme under this investigation, code-named ‘Hermes’, caused an estimated damage of at least €410 million in VAT losses to several EU Member States.
Over 300 searches took place today in Austria, France, Germany, Italy, Malta, the Netherlands, Portugal and Spain, at the suspects’ homes and offices of companies belonging to the organised crime group, as well as tax advisers, lawyers and transport companies. In addition, 62 suspects were detained in Portugal (39), Spain (20) and Italy (three).
Law enforcement also executed orders to seize up to €310 million. Bank accounts and companies’ shares were frozen and real estate and vehicles, including luxury cars, were seized, as well as cash and golden coins, worth up to €9 million.
Based on the evidence, the transnational criminal groups under investigation set up an intricate network of intermediary companies in Spain, Italy, Portugal, Austria, France and Malta with the aim of defrauding VAT rules on intra-community transactions – as cross-border transactions between Member States are exempt from value added tax (VAT). This was done in order to trade the goods through a fraudulent chain of companies and 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.
A criminal ecosystem with multiple ramifications
Investigation ‘Hermes’ concerns two distinct criminal syndicates that collaborated to maximise their criminal proceeds. They are suspected of having established separate carousel fraud schemes, while making use of each other’s companies, businesses and available goods. They also allegedly made frequent use of each other’s logistics functions and channelled proceeds through each other’s companies as part of their money-laundering activities, and used encrypted communication to coordinate their actions.
The criminal syndicates were using a similar modus operandi, and partly also the same individuals, as the perpetrators investigated under EPPO’s investigations Admiral and Moby Dick.
Both criminal groups were previously active in other countries but reallocated geographically to continue the fraud undetected.
One of the suspects under investigation was formerly the leader of a criminal network responsible for a VAT fraud scheme targeting Sweden between 2019 and 2023. When the scheme was investigated by Swedish authorities and the companies went bankrupt, the suspect travelled to Portugal to set up a similar large-scale VAT fraud scheme, by creating companies through his relatives and persons of trust. Based on the evidence, this branch of the criminal syndicates was also laundering money as a service to other criminal groups. This case shows how a criminal organisation may reconstitute itself following law enforcement action, requiring a further immediate intervention by authorities.
Investigation ‘Hermes’ involved the EPPO offices in Madrid (Spain), Porto (Portugal), Milan and Palermo (Italy), Paris (France), Graz (Austria), Valetta (Malta), Bucharest (Romania), Rotterdam (Netherlands), Frankfurt (Germany) and Vilnius (Lithuania), and counted on the support of Europol and law enforcement in those countries.
All persons concerned are presumed innocent until proven guilty in the competent 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
- Spain’s National Police’s unit specialised in economic and tax crime (Unidad de Delincuencia Económica y Fiscal de la Policía Nacional – UDEF)
- Spain’s Tax Agency (Agencia Estatal de la Administración Tributaria - AEAT)
- Portugal’s Judicial Police (Polícia Judiciária – PJ)
- Portugal’s Tax and Customs Authority (Autoridade Tributária e Aduaneira – AT) – Directorate of Fraud Investigation and Special Actions (Direção de Serviços de Investigação da Fraude e de Ações Especiais)
- Portugal’s National Republican Guard (Guarda Nacional Republicana – GNR)
- Portugal's Asset Recovery Office (Gabinete de recuperação de ativos)
- Italian Financial Police of Varese (Guardia di Finanza)
- French Anti-Fraud Office (ONAF)
- Austrian Anti-Fraud Office (Amt für Betrugsbekämpfung)
- The Fiscal Information and Investigation Service of the Netherlands (FIOD)
- German tax investigation office in Frankfurt
- Malta’s Financial Crime Investigation Department (FCID)
- Publication date
- 7 October 2026
- Author
- European Public Prosecutor’s Office