Analysis Mida. Credit score: X @euprosecutor
A fourth conviction was made in a VAT fraud scheme of 195 million euros throughout 17 international locations. Midas investigation.
The Covid face masks have been reportedly offered to Germany’s personal well being ministry utilizing a faux Hong Kong firm. On July 15, 2025, the person was sentenced to 18 months by a German courtroom for his function in one of many greatest cross-border tax frauds within the EU so far.
Enormous VAT scams exploited EU tax loopholes
What is named Midas The instances led by the European Prosecutor’s Workplace (EPPO) deal with VAT Carousel fraud. There, earlier than the products transfer tax-free throughout the EU after which disappear from the ebook.
In accordance with Eppo, the convicted man acted as director of a lacking dealer firm who helped steal about 1 million euros of stealing on VAT.
The investigation revealed a community of shell firms, faux identities and fictitious invoices, allegedly used to promote smartphones, digital gadgets, and private protecting gear (PPE) in the course of the pandemic.
Covid Face Masks Pretend China Agency
One of many bravest parts of this scheme concerned a protecting face masks bought in 2020 by the German Federal Ministry of Well being. The EPPO revealed that the province unconsciously bought masks from an organization that pretends to be based mostly in Hong Kong. In truth, the products didn’t depart Germany.
At the beginning of the availability chain, together with the faux Hong Kong entrance, didn’t refund VAT after sale, leading to direct lack of taxpayer cash.
The complete scale of fraud was searched in February 2024 in 17 international locations and printed beneath.
- 14 arrests
- Over 15 million euros of smartphones have been seized
- 3 million euro yacht, luxurious watch, 1.2 million euro money and crypto
- A number of high-end vehicles together with Rolls-Royce, BMW and Vary Rover
- 2.5 kg of gold and designer jewellery
The suspect allegedly used encrypted communications, a buffer firm and a straw man to guard the surgical procedure.
EU-wide investigations have now been made attainable by the facility of the EPPO to coordinate cross-border behaviour at excessive pace. I acquired help from:
- Europole
- Eurojust
- Germany: Tax Investigation Bureau (Berlin, Bielefeld, Cottbus, Munster, Nuremberg), Police HQ (Northern Hesse, Brandenburg), State Legal Police (Berlin and Brandenburg)
- UK: Revenues and Customs beneath Her (HMRC)
- Italy: Guardia Di Finanza (GDF)
- Austria: Fraud Administration Workplace (Determine)
- Cyprus: Cyprus Police Division
- Czech Republic: Nationwide Organized Crime Company (NCOZ)
- Estonia: Estonia Tax and Customs Committee (EMTA)
- Malta: Monetary Crime Investigation Division (FCID)
- Netherlands: Monetary Info and Analysis Companies (FIOD)
- Poland: Warsaw Police Financial Crime
- Portugal: Republican Nationwide Guard (GNR)
- Sweden: Swedish Financial Crime Bureau (SECA)
- Slovakia: Nationwide Legal Company (PPZ)
- Albania: Particular Prosecutor’s Workplace for Corruption and Organized Crime (SPAC)
- Slovenia, Hungary and Croatia additionally participated within the mission.
Regardless of the large scale of fraud and confirming the involvement of the Ministry of Nationwide Well being, no investigations have been reported concerning authorities oversight or regulation failures.
There have been solely 4 convictions thus far, however critical questions stay as to who else stays unhurt.
See all European information.
