(Luxembourg, 11 April 2025) – Three perpetrators of a €24 million VAT fraud involving simulated exports of cars were convicted yesterday by the Hagen District Court in Germany, following an investigation carried out by the European Public Prosecutor’s Office (EPPO) in Cologne.
The three, who were accused of being the ringleaders of a criminal organisation dedicated to car sales and systematic evasion of VAT, were sentenced to five years and nine months (reduced by three months, considered as served), three years and nine months and one year and nine months in prison.
Since 2022, the EPPO has been investigating a criminal network that fraudulently sold used cars from Germany to buyers in Italy and other southern EU countries, using an intra-community VAT ‘carousel’ fraud – a complex criminal scheme that takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value-added tax (VAT).
The vehicles were selected on internet platforms in several Member States and purchased through intermediaries in Germany. The defendants then used a network of shell companies and forged invoices to simulate that the cars were being sold from Germany to other Member States, in order to evade the payment of VAT. They issued invoices for alleged deliveries to companies that in reality did not have any business activity and did not fulfil their tax obligations in their countries. The vehicles were then actually delivered to other recipients than those listed as buyers on the sales invoices.
In this manner, the defendants supplied vehicles worth more than €100 million, causing a tax damage of at least €24 million.
The court considered it proven that the defendants had issued invoices for vehicle sales to more than 40 shell companies since 2017, created with the sole purpose of evading the payment of VAT. The fraudulent scheme was presumably much bigger, with an estimation of more than 180 missing trader companies involved.
In its judgment, the court emphasised that the defendants had systematically deceived tax authorities over a period of years. The court also stated that the investigation had only been pursued with sufficient intensity after the case was evoked by the EPPO, in 2022.
The successful conclusion of this investigation was the result of the cooperation with the North Rhine-Westphalian Office for Combating Financial Crime (LBF NRW) and the German police in Hagen. Evidence-gathering activities were also carried out by the EPPO in France, Italy and Spain.
The EPPO is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.