Investigation Water into Wine: 11 arrests as probe into international criminal organisation suspected of multi-million-euro VAT fraud involving sales of diesel expands

(Luxembourg, 29 June 2026) – Last week, at the request of the European Public Prosecutor’s Office (EPPO) in Berlin (Germany) and Katowice (Poland), 11 suspects were arrested in Germany, Poland and Latvia in an investigation against a criminal organisation suspected of a large-scale VAT fraud scheme, code-named ‘Water into Wine’, involving the sales of diesel. Over 100 searches were carried out in Germany and Poland, as well as in Bulgaria, Czechia, Latvia and Spain.

As previously reported, the defendants behind the fraud scheme are believed to have distributed so-called designer fuels, which are chemically modified products designed to elude taxation, using a complex chain of triangular transactions via several companies. The designer fuels are entering the German market via Poland, falsely declared as lubricating oil. Once they reach Germany, the products are relabelled and re-declared as diesel, to bypass energy taxes. This tactic breaks the traceability of the supply chain and conceals the true nature and origin of the products.

The evidence indicates that since mid-2023, large quantities of these products have been imported into Germany via Poland. To disguise the illicit supply chain, original transport documents were reportedly destroyed and replaced with fictitious invoices and delivery notes issued by so-called missing traders and buffer companies to create the appearance of a legitimate, tax-compliant supply chain.

The scheme is believed to have been highly organised and aimed at evading energy taxes and VAT on a massive scale. Polish distributors allegedly organised the transport and sale of designer fuels originating from Latvia, acquired customers in Germany, and issued false invoices describing the products as diesel. It is estimated that the resulting tax losses to Germany and Poland amount to over €90 million in unpaid VAT and over €150 million in excise duties since 2023. 

International takedown

Last week, more than 60 searches were carried out in companies and private residences in Germany (region of Berlin), almost 40 in various regions in Poland and a handful in Bulgaria, Czechia, Latvia and Spain. During the searches, up to €117 million was seized in assets, real estate, bank accounts, luxury cars and luxury items as well as drugs. The arrested individuals are all suspected of VAT fraud, organised crime and money laundering offenses. 

This investigation counted on the support of the German tax authorities (Steuerfahndung, Finanzamt für Fahndung und Strafsachen) in Berlin, Potsdam, Hamburg, German customs authorities in Rostock (Zollfahndungsamt), Berlin and Brandenburg State Office of Criminal Investigation (Landeskriminalamt), the Polish Police (Centralne Biuro Śledcze Policji) and Tax administration (Krajowa Administracja Skarbowa) along with the FIU (Generalny Inspektor Informacji Finansowej) and the Spanish National Police (Policía Nacional). Europol facilitated the coordination and communication via a Virtual Command Post and provided valuable analytical and operational support in preparation of the investigative measures.

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.