Major Tax Fraud Operation Uncovered: Authorities Conduct Raids Across Seven European Countries

Law enforcement agencies from seven European nations have executed over 100 coordinated searches to dismantle a sophisticated tax fraud network that allegedly evaded millions in value-added tax (VAT). The operation, spearheaded by the European Public Prosecutor's Office (EPPO) in collaboration with local authorities, targeted an organized group suspected of orchestrating cross-border tax fraud involving electronic goods.

According to official sources, the investigation focused on a criminal network that had established numerous shell companies since 2018. These entities were reportedly used to facilitate the sale of smartphones and other small electronic items across European markets. The suspects exploited a tax regulation designed for second-hand goods, applying it illicitly to new products, thereby circumventing legal VAT obligations and causing an estimated financial loss of approximately 48 million euros to European treasuries.

As part of the large-scale enforcement action, authorities conducted simultaneous searches at various locations in Germany, Spain, the Netherlands, and four other countries. Seven individuals were detained during the raids, which were supported by more than 300 tax investigators and police officers. The coordinated effort saw the seizure of significant assets, including cash, mobile devices, luxury watches, automobiles, jewelry, and gold, collectively valued at around four million euros.

To ensure effective coordination, Europol established a virtual command center to support local teams in real-time during the operation. Additionally, an expert from Europol was dispatched to Nuremberg to oversee and assist with on-site investigations through a mobile office setup.

The EPPO, an independent judicial authority of the European Union, is responsible for investigating crimes that compromise the financial interests of the EU, such as large-scale VAT fraud and cross-border financial offenses. In this case, the organization played a central role in leading the investigation and ensuring collaboration among the various national agencies involved.

Preliminary findings indicate that the accused individuals systematically misused the margin scheme, which allows reduced VAT rates for used goods, to sell new electronic products. This approach enabled them to avoid the correct tax payments and move substantial profits through the shell companies, making detection and enforcement more challenging for authorities.

The operation underscores the ongoing challenges faced by European authorities in combating organized financial crime, particularly schemes that exploit complex cross-border business structures. The successful execution of these raids is seen as a significant step in curbing VAT fraud and safeguarding public funds across the EU member states.

Investigations are ongoing, with authorities continuing to analyze seized evidence and pursue additional leads in connection with the case. The EPPO and its partner agencies have reiterated their commitment to pursuing those who engage in large-scale tax evasion and to strengthening measures aimed at preventing similar offenses in the future.