VAT Fraud Ring Broken In Europe, 520 Mn Euros Seized: Italian Prosecutors

Investigators have broken up a mafia-linked crime ring carrying out VAT fraud in Europe, issuing around 40 arrest warrants and seizing goods worth 520 million euros ($548 million), Italian prosecutors said Thursday

Rome, (APP - UrduPoint / Pakistan Point News - 14th Nov, 2024) Investigators have broken up a mafia-linked crime ring carrying out VAT fraud in Europe, issuing around 40 arrest warrants and seizing goods worth 520 million euros ($548 million), Italian prosecutors said Thursday.

A judge in Milan ordered the crackdown on the ring for cross-border Value-Added Tax fraud via the sale of computer and IT equipment, and for laundering the profits, said a statement from prosecutors.

Those responsible had issued false bills worth an "unprecedented" total of 1.3 billion euros, the statement added.

The mafia groups involved were the Cosa Nostra of Sicily, as well as two clans of the Camorra mafia group in Naples, according to the Ansa news agency.

Investigating magistrates in Milan and the southern city of Palermo were involved in the case, said prosecutors.

The Milan judge ordered that 34 people be held in pre-trial detention and another nine under house arrest.

Police in several European countries -- Bulgaria, Croatia, Cyprus, the Czech Republic, Luxembourg, the Netherlands, Slovakia, Spain and Switzerland -- as well as the United Arab Emirates are also carrying out raids and seizing goods in connection with the case.

- Luxury assets seized -

Close to 200 people and more than 400 companies are implicated in the investigation.

"In Italy alone, 129 bank accounts were frozen and 192 real estate holdings as well as 44 luxury cars and boats were seized", Europol said.

Prime Minister Giorgia Meloni, congratulating the investigators, said it demonstrated Italy's commitment to fighting tax evasion, which is estimated to cost the country more than 80 billion euros a year -- or four percent of the country's GDP.

As part of this operation, known as "Moby Dick", seven European arrest warrants were issued for suspects located in Bulgaria, the Czech Republic, the Netherlands, Spain and other non-EU countries.

The Milan judge who ordered the seizure of goods and assets worth 520 million euros has accused the leaders of the network of "favouring association with criminal mafia groups", notably in Sicily and the Campania region in southwestern Italy. This is considered an aggravating factor.

This kind of VAT "carousel" fraud -- involving businesses in at least two different EU countries -- costs the European Union close to 50 billion euros per year, according to the latest available data from the EU's law enforcement agency, Europol.

"VAT carousel fraud takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value added tax," the statement said.

The tax-evasion scheme relates to the obtention of VAT deductions or reimbursements on inter-community goods supplies where the VAT has not been paid to the tax administration concerned.

The goods were traded "through a fraudulent chain of missing traders -- who would vanish without fulfilling their tax obligations", the statement said.

"Other companies in the fraudulent chain would subsequently claim VAT reimbursements from the national tax authorities."

European chief prosecutor Laura Kovesi said the body had long been warning about "dangerous organised crime groups' heavy involvement in fraud to the EU budget.

"'Moby Dick' shows that there are not two separate criminal worlds," Kovesi said.

"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."

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