EPPO Secures First Convictions In €200M VAT Fraud Case

(Luxembourg, 23 October 2026) – Today, the European Public Prosecutor’s Office (EPPO) in Hamburg (Germany) secured the conviction of two members of a criminal organisation responsible for a vast intra-community VAT fraud scheme involving Hawala money laundering, following an investigation code-named Goliath. These are the first convictions in an EPPO case in Germany in which a court has found that the defendants acted as members of a criminal organisation – a significant legal milestone in recognising the organised nature of VAT fraud schemes and holding perpetrators accountable, with potential implications for how similar cases are judged in the future. The Düsseldorf Regional Court sentenced two defendants – a Turkish national and a Danish citizen who was arrested in Kenya on 23 May 2024 – to seven years and two months’ imprisonment and five years and eight months in prison, respectively. Both had already been convicted in March 2025 in the same investigation for other instances of tax evasion, and are currently serving sentences in Germany of more than five years. The Turkish national was convicted for being a member of a criminal organisation and as a perpetrator of VAT fraud in 26 cases, acting as ‘de facto’ manager, as well as aiding and abetting VAT fraud in relation to 10 shell companies (used as missing traders and buffers in the scheme). The Danish national was also found guilty of supporting a criminal organisation and of aiding and abetting VAT fraud in five cases. Two other defendants indicted in this case have yet to face trial in these proceedings, as they are currently in prison in Denmark. The proceedings against a third defendant, who acted as managing director of one of the main companies, but was not involved in the VAT fraud itself, were discontinued, in accordance with Section 153 of the German Code of Criminal Procedure. A criminal organisation running an end-to-end VAT fraud scheme The court found that the two defendants had first joined an international criminal organisation focused on the sale of electronic goods. To generate higher proceeds from the VAT fraud, the defendants simultaneously planned their own network, which was controlled primarily by them. This required the establishment of a large number of shell companies domestically and abroad, with the actual trading of goods, including AirPods and other electronics, carried out from an office in Istanbul (Turkey), managed by one of the defendants and other members of the criminal organisation. The criminal organisation operated in secrecy, using encrypted chats and aliases to conceal the defendants’ identities and activities. The defendants also worked closely with a former notary, who notarised documents in the absence of the straw men. In addition, the defendants used various methods to launder the profits generated by the scheme. The court found that the defendants used a Hawala network – an unregulated financial channel based on a network of trusted brokers – to transfer the illicit proceeds. The court considered that the defendants’ conduct caused a damage of €200 million to the EU and national budgets between 2019 and 2023. The decision was issued at first instance and may still be appealed. 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.