In a large-scale operation by the European Public Prosecutor's Office in 17 EU countries, including Croatia, a total of 14 people have been arrested in connection with tax evasion totalling around EUR 195 million.

The operation was coordinated by the European Public Prosecutor’s Office in Germany and concerned a criminal group that committed this tax fraud through the sale of smartphones, electronic devices and protective masks, reports N1 Zagreb.

As part of the operation, codenamed Midas, more than 180 searches were carried out yesterday in Albania, Austria, Cyprus, the Czech Republic, Estonia, Germany, Hungary, Italy, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Sweden and the United Kingdom. More than 680 police officers and tax investigators were deployed for this purpose.

Yachts, cash, watches, gold, cars…

They confiscated various devices worth over 15.3 million euros as well as a yacht worth three million euros and a further 1.2 million euros in cash and cryptocurrencies. Several cars were seized, including a Rolls-Royce, a BMW and a Range Rover, and more than 2.5 kilogrammes of gold, jewellery and luxury watches were found in the suspects’ homes.

It has been reconstructed that all this was created by a circular tax fraud utilising the cross-border rules that allow VAT exemption between EU member countries.

It all started in 2017, when a German company launched a chain of tax frauds on the sale of small electronic devices. This involved the use of so-called disappearing traders who disappeared before they could pay their tax obligations.

The investigation lasted two and a half years

The EPPO suspects that the organisers of this fraud entered the market for protective masks in 2020, which were a sought-after commodity during the Covid-19 pandemic.

Although according to the documents a Hong Kong company was involved in the resale, it was found that the masks were in a warehouse in Germany and remained there until the German Ministry of Health bought them from this alleged Hong Kong company. None of the companies involved in the sale paid taxes.

The investigators discovered that all of this was concealed behind numerous fictitious companies and false owners. The investigation, in which European public prosecutors from 12 countries worked together, lasted two and a half years. Complicated contacts and secret communications that made these frauds possible were uncovered.