Europol supports EPPO-led probe targeting individuals behind a value-added tax fraud scheme involving the trade of over 10,000 cars.

Today, a multinational team comprising over 2,000 tax, customs, and police investigators from seven countries executed a coordinated operation resulting in five arrests, over 450 searches, and the seizure of real estate and vehicles in Belgium, Germany, Hungary, Italy, the Netherlands, Portugal, and Spain.

Europol played a pivotal role in supporting Operation Huracán, led by the European Public Prosecutor’s Office (EPPO) in Cologne. This operation targeted a significant value-added tax (VAT) fraud scheme involving the international trade of over 10,000 cars. The organized crime group’s estimated fraudulent turnover is EUR 225 million, with VAT losses reaching at least EUR 38 million. The Operational Network @ON, funded by EU Project ISF4@ON, supported the investigation and action day.

The investigation, initiated with a report to the EPPO from an Italian tax authority in January 2021, unveiled a large-scale international VAT fraud scheme. The EPPO’s European Delegated Prosecutors and investigators from the EPPO’s Central Office discovered the network of missing traders and the organized crime group behind the scheme within months.

The sophisticated modus operandi of the organized crime group involved a Germany-based buffer company acting as a legitimate entity on paper. This company purchased cars online from a German dealer, claimed VAT, and sold the cars to missing traders in Italy and Hungary. The missing traders, exploiting intra-community VAT rules, sold the cars to end customers without paying VAT to the state.

Approximately 60 individuals are suspected of participating in the organized group or supporting the main suspects. Between 2017 and June 2023, the criminals executed a fraudulent turnover exceeding EUR 225 million and caused VAT losses exceeding EUR 38 million.

The investigation uncovered the issuance of false invoices by the suspects, creating an illusion of legitimate transactions. This scheme, aside from VAT fraud and tax evasion, led to suspicions of organized crime, money laundering, and document forgery, allowing unfair competition by selling cars below market prices.

Europol provided comprehensive analytical support, crosschecking information, reporting findings to the EPPO, and facilitating information exchange among affected EU Member States and third countries. During the action day, Europol deployed specialists and officers with advanced capabilities for mobile device extraction, underscoring their commitment to combating transnational financial crimes. Operational meetings organized by Europol further enhanced collaborative efforts during the action day.

Leave a Reply

Your email address will not be published. Required fields are marked *