Investigators from the European Public Prosecutor’s Office (EPPO) carried out searches and made arrests in Germany and Belgium on Tuesday as part of a probe into a suspected €60 million VAT fraud scheme.
Two suspects were arrested and 20 homes and business premises were searched in North Rhine-Westphalia and Belgium, the EPPO disclosed on Wednesday.
Officers seized cash, luxury watches, handbags and vehicles worth about €300,000, as well as a loaded firearm.
The case, code-named Money Cat, centres on an alleged criminal organisation operating between Germany, France and Belgium, with nine suspects under investigation.
The group is suspected of trading goods including protective masks and packaging materials.
The investigation involves suspected “missing traders” and shell companies — businesses that exist mainly on paper — used in schemes that exploit the VAT exemption on cross-border trade within the EU.
Alleged false invoices and international money transfers
One main suspect based in Germany allegedly declared VAT-exempt cross-border supplies to companies in France and Belgium suspected of acting as missing traders, EPPO said.
The same suspect is also suspected of unlawfully deducting input tax using invoices from companies that allegedly provided no real services or products.
Investigators suspect fictitious invoices worth more than €11 million were issued as part of the scheme.
The inquiry also indicates money was transferred through international banking channels before being converted into cash and redistributed through the network, with transfers identified to accounts in several countries including China and Turkey.
The estimated tax damage exceeds €60 million, although the precise amount is still being assessed.
EPPO said the operation was supported by financial crime and police authorities in Germany, as well as an investigating judge and units of the Belgian Federal Police.
