An investigation by the European Attorney General’s Office has dismantled a network responsible for VAT fraud worth €25 million, detaining 17 people in a joint operation in eight countries, including Portugal.
According to a statement from the European Attorney General's Office (EPPO), the operation took place on Tuesday, the 21st, and 17 people were arrested as part of "a broad operation" against an alleged criminal network based in Spain, that “will have orchestrated a massive VAT fraud of 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 EPPO investigation.
The “Marengo Rosso” operation was led by the EPPO office in Madrid, with 39 searches being launched and people arrested in the Czech Republic, Hungary, Italy, Luxembourg, Portugal, Poland, Slovakia and Spain.
"At stake is an alleged VAT carousel fraud, a complex criminal scheme that takes advantage of European legislation for cross-border transactions between Member States, since they are exempt from VAT", explains the EPPO statement.
According to the investigation, the fraudulent scheme involved the use of “front companies in different countries, through which mobile phones, tablets, computers and other electronic equipment were ostensibly traded, using fictitious invoices, with the aim of evading VAT payment”.
“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 illegitimate profits of massive proportions. Finally, these goods were sold at very competitive prices through online platforms in several countries”, adds the EPPO note.
According to the evidence collected by the investigation, the illegitimate profits were then “laundered and reinvested in luxury real estate in different countries, including the Czech Republic, Italy and Portugal”.
The statement from the European Public Prosecutor's Office also states that one of the main suspects in the operation is also considered to be the leader in another investigation in Italy, in which the EPPO carried out six arrests and seized 40 million euros.