An investigation by the European Attorney General’s Office has dismantled a network responsible for VAT fraud worth €125 million, detaining 17 people in a joint operation in eight countries, including Portugal, the European agency said on Wednesday .
According to a statement from the European Public Prosecutor’s Office (EPPO), the operation took place on Tuesday the 21st and 17 people were arrested as part of “a wide-ranging operation” against an alleged criminal network in Spain, which “will carry out a massive VAT fraud of have orchestrated 25 million euros through the sale of mobile phones and other electronic equipment,” adding that one of the main suspects was arrested in Milan, Italy, as part of another EOM investigation.
The “Marengo Rosso” operation was led by the EOM Madrid office, with 39 searches and arrests in the Czech Republic, Hungary, Italy, Luxembourg, Portugal, Poland, Slovakia and Spain.
“It is an alleged VAT carousel fraud, a complex criminal scheme that abuses European law for cross-border transactions between Member States, as they are exempt from VAT”explains the EPPO statement.
According to the investigation, the fraudulent scheme involved the use of “front companies in various countries, through which mobile phones, tablets, computers and other electronic equipment were ostensibly traded using fictitious invoices, with the aim of evading the payment of VAT”.
“The chain of shell companies also made it possible to claim VAT refunds from the national tax authorities to which the owners would not be entitled, culminating in illicit profits of enormous proportions. Finally, these goods were sold at very competitive prices through online platforms in many countries”adds the EPPO note.
According to the evidence gathered by the investigation, the illicit profits were then “laundered and reinvested in luxury real estate in several countries, including the Czech Republic, Italy and Portugal”.
The statement from the European Public Prosecutor’s Office also says that one of the main suspects in the operation is also seen as the leader of another investigation in Italy, in which the EPPO made six arrests and seized €40 million.
Source: DN
