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(Luxembourg, 24 May 2024) – An investigation by the European Public Prosecutor’s Office (EPPO) in Brussels (Belgium), code-named ‘Kingdom’, has led to the arrest of seven suspects in the Netherlands, in a probe into a €13 million VAT fraud.
A Belgian subsidiary of a Dutch company had requested a VAT refund from the Belgian Treasury, amounting to €13.7 million. The requested amount was paid by the Belgian Treasury to several bank accounts owned by the suspects. However, one of the banks suspected fraud, and returned €3.7 million of this amount to the Treasury.
According to the investigation, the claim to the Belgian Treasury was unlawful, as no actual goods were traded, and only fake invoices and fraudulent VAT declarations were submitted to the Belgian tax authorities. The Dutch company, controlled by the suspects, was known to the authorities in the Netherlands as a missing trader – an entity used for the exclusive purpose of obtaining fraudulent tax refunds, taking advantage of EU rules on cross-border transactions between its Member States, as these are exempt from VAT. Some of the suspects – all living in the Netherlands at the time of these facts – were already known to law enforcement for similar offences in the country. It is understood that they decided to extend their activities to Belgium, in order to escape detection.
After this first VAT refund in Belgium, the suspects tried to replicate the scheme with the Belgian branch of another Dutch company, also controlled by them. This time, the suspects claimed a refund of over €4 million, which was not paid out, as suspicions had arisen.
Based on the evidence, a substantial part of the illicit gains has been transferred to the United Arab Emirates, and the remainder has been used to purchase expensive cars, luxury goods and for gambling in casinos.
Searches were carried out on 23 May 2024 in the premises of companies in the Netherlands, connected to the alleged perpetrators of the fraud, as well as in the houses of the suspects. The investigative measures were executed with the support of 97 law enforcement officers from the Dutch Fiscal Information and Investigation Service (FIOD), as well as from the Dutch Public Prosecutor’s Office for Serious Fraud, Environmental Crime and Asset Confiscation (Functioneel Parket) and the Belgian Federal Police’s Central Unit for Economic Crime (CDGEFID/OCDEFO).
During the searches, law enforcement officers seized luxury goods worth more than €200 000, €7 000 in cash and a car.
In a previous national investigation into money laundering involving some of the suspects, the FIOD and the Dutch Public Prosecutor’s office had seized two Porsches and one Lamborghini, as well as four bank accounts worth a combined total of €671 000. These assets are understood to have been acquired with part of the unlawfully obtained VAT refund from the Belgian Treasury, and have therefore been seized in the EPPO investigation, to compensate the damage.
All persons concerned are presumed to be innocent until proven guilty in the competent Belgian 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.