Five people suspected of organising a VAT fraud scheme linked to sales of wireless earbuds were arrested in Czechia.
Assets were also seized in Czechia, Germany and Lithuania as part of the probe, code-named “Echo,” the European Public Prosecutor’s Office (EPPO) announced on Friday.
The suspects are believed to be ringleaders of an organised crime group accused of running a VAT fraud system involving AirPods since at least 2019, causing an estimated €20 million in damage between 2019 and 2023.
Investigators said the suspected scheme exploited EU rules allowing cross-border transactions between member states to be exempt from value-added tax (VAT) by using shell companies to simulate cross-border supply chains.
That allegedly enabled the group to claim VAT back in Germany without the corresponding VAT being declared or paid there.
Assets seized and earlier convictions
The five suspects were described as managing directors or “actual directors” of companies linked to the alleged fictitious supply chains, with firms located in Bulgaria, Czechia, Germany, Hungary, Lithuania and Slovakia, the EPPO said.
Real estate was seized in Czechia and bank accounts were frozen in Czechia, Germany and Lithuania.
Eight other suspects have already been convicted earlier in the investigation, including one main organiser, the EPPO said, adding that inquiries into other suspects are continuing.
The operation was supported by national authorities in Germany and Czechia, including tax investigation units in Chemnitz-Süd and Würzburg and the Central Office for Combating Money Laundering and Asset Recovery Bavaria in Germany, as well as the Czech police’s National Centre for Combating Organised Crime.
All suspects are presumed innocent until proven guilty in court, the EPPO said.
