EPPO: Money Cat Busts €60 Million VAT Fraud Ring

• The European Public Prosecutor's Office (EPPO) conducted searches and arrests on September 16, 2026, in Germany and Belgium as part of its "Money Cat" investigation.
• Two suspects were arrested, and 20 premises were searched, leading to the seizure of approximately €300,000 in assets and a loaded firearm.
• The probe targets a suspected large-scale cross-border VAT carousel fraud EU scheme involving missing traders and shell companies, with estimated tax damages exceeding €60 million.
• Nine suspects are currently implicated in the criminal organization, which operated across Germany, France, and Belgium, trading goods from protective masks to packaging materials.
• The fraud involved declaring VAT-exempt supplies to suspected missing traders and unlawfully deducting input tax based on over €11 million in fictitious invoices, with funds laundered internationally to countries like China and Türkiye.

The alleged scheme, characterized by the use of missing traders and shell companies, is believed to have caused tax damages exceeding €60 million, though the precise figure is still under investigation.

The European Public Prosecutor's Office (EPPO), operating from its Cologne office in Germany, recently executed a significant enforcement action as part of its "Money Cat" investigation. On September 16, 2026, authorities conducted searches and made arrests targeting a suspected large-scale VAT fraud scheme involving a sophisticated criminal organization. These coordinated efforts spanned North Rhine-Westphalia in Germany and Belgium, resulting in the apprehension of two suspects.

A total of 20 private residences and business premises were subjected to searches during the operation. Investigators successfully seized substantial assets, including considerable amounts of cash, luxury watches, high-end handbags, and various vehicles, with an estimated combined value of approximately €300,000. Additionally, a loaded firearm was recovered. While bank accounts have been frozen, their full evaluation remains ongoing. The alleged scheme, characterized by the use of missing traders and shell companies, is believed to have caused tax damages exceeding €60 million, though the precise figure is still under investigation.

The "Money Cat" probe centers on a complex cross-border VAT carousel fraud EU scheme that exploited the VAT exemption applicable to transactions between European Union Member States. This intricate operation relied on a network of companies designed to either evade VAT payments entirely or facilitate the fraudulent deduction and reimbursement of VAT. The EPPO's investigation currently implicates nine individuals suspected of involvement in this criminal organization, which operated across Germany, France, and Belgium.

The illicit activities involved the trade of various goods, ranging from protective masks to packaging materials. A key suspect, based in Germany, is alleged to have declared VAT-exempt cross-border supplies to numerous companies in France and Belgium, which are themselves suspected of acting as missing traders within the scheme. Concurrently, this individual is believed to have unlawfully claimed input tax deductions based on invoices issued by entities that allegedly provided no genuine services or products. Investigators estimate that fictitious invoices exceeding €11 million in value were generated as part of this elaborate setup. Further financial scrutiny revealed that significant sums of money were moved through international banking channels, subsequently converted into cash, and then redistributed throughout the criminal network, with transfers traced to accounts in countries including China and Türkiye.

This extensive missing trader fraud investigation Germany underscores the European Public Prosecutor's Office's critical role as the independent public prosecution body of the European Union. Its mandate is specifically to investigate, prosecute, and bring to judgment crimes that harm the financial interests of the EU. The "Money Cat" case exemplifies the type of sophisticated, cross-border criminal activity that the EPPO is uniquely positioned to combat, given its jurisdiction across multiple member states.

The ongoing nature of the investigation means that all persons concerned are presumed innocent until their guilt is established in a competent court of law. The successful execution of the searches and arrests was significantly aided by the support of national authorities, specifically the Public Prosecutor’s Office in Duisburg (Staatsanwaltschaft Duisburg), which provided crucial administrative and legal assistance for asset recovery efforts. This collaborative approach highlights the concerted effort to tackle large-scale European Public Prosecutor's Office VAT fraud and protect the integrity of the EU's financial system.

Lawyers and compliance officers advising clients engaged in cross-border trade within the EU should review their VAT compliance frameworks, particularly concerning transactions with new or unfamiliar trading partners, to mitigate exposure to sophisticated missing trader or carousel fraud schemes. This EPPO action signals heightened enforcement against such activities, necessitating robust due diligence and internal controls to avoid inadvertent implication in criminal networks.

Source: Original reporting via European Public Prosecutor's Office.