Arrest Warrants Issued in Bulgaria, Czechia as part of EU Probe into €520m VAT Fraud
Source: Balkan Insight
The European Public Prosecutor’s Office (EPPO) announced on Thursday it had detained 43 suspects in connection with a 520-million-euro VAT “carousel” fraud case involving EU states including Bulgaria, Croatia, Czechia and Slovakia.
Led by the EPPO offices in Italy’s Milan and Palermo, the EPPO said the investigation, codenamed “Moby Dick”, involved 160 searches in more than 10 countries into 195 individuals and 400 companies, including many linked to several mafia clans in Italy.
A freezing order of over 520 million euros is in execution to compensate the damage to the EU and the national budgets, the EPPO said. In Italy alone, 129 bank accounts were frozen, 192 real estate properties seized, together with 44 luxury cars and boats.
The suspects are alleged to have been engaging in missing trader intra-community VAT fraud (MTIC), where criminals declare zero VAT rating on sales of goods across EU borders on a B2B basis when in fact they have been sold with VAT charged. The criminals then disappear without declaring this VAT.
Such cross-border fraud, notoriously difficult to investigate and successfully prosecute, has been a magnet for organised crime and the reason why the EPPO was established seven years ago. Grouping national prosecutors from EU members states, the EPPO was designed to play a critical role in targeting VAT scams and other crimes against the EU budget, which previously had tended to fall through the cracks when such financial crimes were the preserve of national tax authorities and prosecution offices.
In March, the European Commission published the first-phase report on its attempt to quantify the value of MTIC fraud, which is estimated to cost EU member states between 500-100 billion euros each year.
“‘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,” said European Chief Prosecutor Laura Kovesi. “‘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 EPPO said the judge in the Court of Milan had ordered the pre-trial detention of 43 of the suspects: 34 will remain in prison and nine under house arrest. Meanwhile, 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.
Investigations by the Organised Crime and Corruption Reporting Project have shown how the Italian mafia often use carousel rackets to launder dirty cash. Such schemes are especially prevalent in countries without a strong rule of law or where the judiciary is captured or dysfunctional and crime networks are extremely powerful, such as Greece, Bulgaria and Hungary. In Slovakia, investigative journalist Jan Kuciak and his fiancee, Martina Kusnirova, were murdered after Kuciak published several articles exposing suspicious VAT rebates paid to Slovak oligarch Marian Kocner, who is serving a 19-year sentence for an unrelated fraud conviction.
The original article: belongs to Balkan Insight .
