VAT Fraud of up to 300 million euros: 18 arrests all over Europe
Wednesday, 15 July 2015
On Tuesday, several European police units arrested 14 people suspected of organising VAT fraud to the sum of several hundred million euros, Europol announced later that same day. The arrests took place in the UK, Germany, Poland and other countries as part of the Vertigo 2 operation. This operation was in collaboration with the European judicial body Eurojust. “The leaders of a criminal network responsible for tax fraud to the sum of 300 million euros” have been arrested, Europol and Eurojust announced from their La Hague headquarters in the Netherlands. “More than 250 officers from all over Europe took part in the arrests of these major targets”, the announcement said. They also said 40 houses were searched.
The suspects are accused of putting in place what we call a “VAT roundabout”, which costs countries millions of euros each year. The fraud consists of importing merchandise tax-free, and selling it with tax included. The importer makes a profit on the tax they are supposed to pay to the Public Treasury. The same goods are then resold and re-exported, but this time the criminals ask for the VAT to be paid back to them, at the tax payer’s cost. Europol has said that the fight against this type of roundabout fraud is a priority in the European fight against organised crime.