Parquet européen : fraude à la TVA

(Luxembourg, 6 March 2024) – At the request of the European Public Prosecutor’s Office (EPPO) in Milan (Italy), one individual has been placed under house arrest, and charged with a €41.8 million VAT fraud and the misappropriation of €6.7 million in public funds, among other offences. 

The defendant, an entrepreneur operating in the wholesale trade of computer equipment and broadcasting technology, is alleged to have committed 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 – as well as money laundering, bankruptcy fraud and serious fraud against the financial interests of the EU. 

According to the investigation, the VAT carousel fraud took place between 2016 and 2020, and was committed by the defendant, via two companies owned and operated by him. One company was active in the wholesale trade of computer equipment, and the other, in the broadcasting communication sector. It is understood that this fraud was conducted via a chain of missing traders – shell companies established for the sole purpose of evading the payment of VAT – and buffer companies, which serve to hide fraud from the authorities. This scheme, which involved the use of invoices for non-existent transactions, is believed to have caused an estimated damage of €41.8 million, and to have led to unfair competition in the computer industry. 

The investigation also revealed grounds to suspect money laundering. It is understood that a portion of the proceeds of the alleged tax evasion – which had been ostensibly justified by what were, in reality, non-existent transactions – was transferred to a third company based in the Cayman Islands which, based on the evidence, was owned and operated by the defendant. 

Simultaneous efforts focused on alleged fraudulent activity by the defendant, in relation to public funding. One of the companies subject to the VAT fraud investigation received, between 2018 and 2022, €6.7 million in financial support for small and medium-sized enterprises – for which a public guarantee of €5.8 million had been provided. The majority of this funding was granted by the EU, for companies that had suffered financial damage during the Covid-19 pandemic. 

It is understood, however, that the defendant, in order to receive such forms of financial support, produced documentation that falsely represented the company’s economic, asset-based and financial reality. This is alleged to have included, for the purpose of obtaining the financing, the implementation of a non-existent business project in Albania, with the fictitious establishment of a company for the sale of VoIP (Voice over Intranet Protocol) equipment. According to the investigations, this false presentation of the investment plan was based on completely unreliable corporate balance sheets that showed a thriving business, without any reference to its significant exposure to the tax authorities and the erosion of its capital. An analysis of the flow of accounts uncovered evidence of a method of stealing publicly guaranteed contributions, which were systemically diverted within 24 hours of being obtained, and ended up in corporate accounts or those of other corporate entities, both in Italy and abroad, which were specifically created for this purpose. 

A joint investigation team, composed of the Italian Financial Police (Guardia di Finanza – Nucleo PEF di Novara), which investigated the alleged VAT fraud and money laundering, and the EPPO Investigative Unit of the Arma dei Carabinieri in Milan, which investigated the alleged fraud to public finances, executed the house arrest warrant, issued by the judge for preliminary investigations at the Court of Novara.

The judge also issued a freezing order at the request of the EPPO, carried out by the Guardia di Finanza, of up to the amount of €41.8 million – the alleged profits of the VAT fraud and money laundering. 

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.