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(Luxembourg, 14 November 2024) – In an investigation led by the European Public Prosecutor’s Office (EPPO) in Milan and Palermo (Italy), code-named 'Moby Dick', detention orders are being executed against 43 suspects. The EPPO is probing a €520 million VAT fraud, with heavy involvement of several mafia groups.
During today’s action, led by the EPPO, 160 searches are being carried out in more than 10 countries, involving hundreds of police officers. Investigative measures are ongoing in several EU countries, including Bulgaria, Croatia, Cyprus, Czechia, Italy, Luxembourg, the Netherlands, Slovakia and Spain, as well as in non-EU countries. A total of 195 individuals are being investigated, with more than 400 companies involved.
A freezing order of over €520 million is in execution to compensate the damage to the EU and the national budgets. In Italy alone, 129 bank accounts are being frozen, and 192 real estate properties seized, together with 44 luxury cars and boats.
According to the investigation, people linked to several mafia clans invested into a criminal syndicate, which set up a highly profitable tax evasion scheme.
European Chief Prosecutor Laura Kövesi:
“’Moby Dick’ is a defining investigation for the EPPO. It has been a while since we started to ring the alarm bell about dangerous organised crime groups’ heavy involvement in fraud to the EU budget. Beyond the colossal damages that they create, we have been warning about the threat to our internal security their activity in this field represents. We now shed light on a first such big case.
‘Moby Dick’ shows that there are not two separate criminal worlds. The world of the really bad and dangerous criminals smuggling drugs, trafficking people on one side; and the world of white-collar criminals, ‘merely’ corrupting and laundering money, on the other side.”
The level of complexity and efficiency of this criminal syndicate committing VAT carousel fraud is unprecedented. Between 2020 and 2023, it issued invoices for the sales of airpods, laptops and other electronic goods of more than €1.3 billion.
Mafia methods also seem to have been used to settle conflicts that arose within the criminal syndicate between the members of the different criminal organisations.
VAT carousel fraud takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value added tax (VAT). Based on the evidence, the suspects established companies in Italy and other EU Member States, as well as in non-EU countries, in order to trade the goods through a fraudulent chain of missing traders – who would vanish without fulfilling their tax obligations. Other companies in the fraudulent chain would subsequently claim VAT reimbursements from the national tax authorities.
The Judge for Preliminary Investigations at the Court of Milan ordered the pre-trial detention of 43 of the suspects: 34 will remain in prison and nine in house arrest. Seven European arrest warrants were issued at the request of the EPPO for suspects located in Bulgaria, Czechia, the Netherlands, Spain and non-EU countries. Another four suspects were subject to a temporary ban from the practice of commercial activities.
The investigation was conducted by the Italian Financial Police of Varese (Guardia di Finanza of Varese) and the Italian State Police (Squadra Mobile di Palermo and Servizio Centrale Operativo), under the supervision of the EPPO. The Italian Financial Police of Milano and Palermo also contributed to the investigation. The investigative measures were carried out also with the support of Europol and of several national law enforcement agencies.
All persons concerned are presumed to be innocent until proven guilty in the competent Italian courts of law.
The European Public Prosecutor’s Office (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.
List of most important partners and national authorities involved:
- Italian Guardia di Finanza
- Italian Polizia di Stato
- Europol
- Spanish Policía Nacional
- Czechia‘s Police (Policie České republiky)
- Luxembourg's Service de Police judiciaire (Section entraide judiciaire internationale)
- Slovakia’s Police Corps (Policajný zbor)
- The Fiscal Information and Investigation Service of the Netherlands (FIOD)
- Bulgaria’s National Investigation Service (Национална следствена служба)
- Croatia’s Police (Ministarstvo unutarnjih poslova)