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(Luxembourg, 10 June 2024) – At the request of the European Public Prosecutor’s Office (EPPO) in Milan (Italy), the Italian Financial Police (Guardia di Finanza) have arrested a third suspect in an ongoing investigation into a large VAT fraud scheme, with estimated damage of approximately €50 million.
Earlier in this investigation, two individuals were already arrested, on suspicion of being the primary organisers of a VAT ‘carousel’ fraud – a 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). Further investigative measures allowed for the identification of a third suspect.
Based on the evidence, the three are the main ringleaders of a complex network through which companies, established in several EU countries, sold over 3 million AirPods, electronic devices and hard drives to numerous shell companies in Italy, administered by figureheads, in order to evade the payment of VAT.
According to the investigation, the goods were sold, under-priced, to these shell companies, making it more difficult to identify the scheme and its perpetrators, while also increasing the illicit profits. Ultimately, the commodities were sold to regular Italian companies at very competitive prices, as well as to other companies in the EU, allowing for massive evasion of VAT.
The judge for preliminary investigations of the Tribunal of Busto Arsizio issued an order for the pre-trial detention of the third suspect, based in the province of Cesena. It is understood that he acted as an intermediary between the Italian companies and the companies abroad, as well as with the end-customers of the goods.
At the time of the arrest, searches were carried out using ‘cash dogs’ – canine units specialised in searching for currency. Law enforcement officers seized two Rolex watches, as well as numerous smartphones and computers, believed to have been used in the fraudulent scheme. During the searches, three rifles were also found and seized, and the weapons permit of the suspect was revoked.
All persons concerned are presumed to be innocent until proven guilty in the competent Italian courts of law.
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.