EPPO Targets €100M VAT Fraud, Arrests 13, Seizes €26M

(Luxembourg, 5 November 2026) – The European Public Prosecutor’s Office (EPPO) in Frankfurt (Germany) and Graz (Austria) have taken action against a criminal network operating cross-border VAT fraud schemes linked to the import and sales of luxury cars, causing estimated losses of €100 million. Under the EPPO-led investigations, code-named ‘Javelin’, searches were carried out yesterday in Austria, Croatia, Czechia, Germany and Poland, supported by over 900 law enforcement agents (tax and police officers). Thirteen individuals were arrested in Germany and Austria. Over 50 suspects are under investigation. In addition, seizing orders of €26 million were executed. In Berlin, two real estate properties were seized, including one with a hostel. Seven real estate properties in Croatia were also seized. Bank accounts were frozen and dozens of cars were also seized, including luxury vehicles, as well as cash, crypto assets, a gun with ammunition and several luxury watches. A network of companies and fraudulent VAT refunds Based on the evidence gathered, five suspected ringleaders and two tax advisors are believed to have orchestrated a VAT carousel fraud scheme that had been operating since at least 2016. The scheme exploited EU rules exempting cross-border transactions between EU Member States from value-added tax (VAT). According to the investigation, companies in several EU Member States, including Austria and Czechia, declared cross-border sales of luxury cars to various companies in Berlin, which acted as so-called ‘missing traders’. Under EU rules, these German companies could purchase the cars at the net price, without paying VAT. When reselling the vehicles in Germany, however, they were required to charge VAT to the buyers and pay it to the tax authorities. Instead, the missing traders allegedly collected the VAT and then disappeared or ceased trading without paying it. The cars were subsequently resold in Germany through intermediary companies, known as ‘buffers’, which helped conceal the fraud and make the transactions appear legitimate. Eventually, the cars were sold to another EU Member State. The final purchaser in Germany, before the cars left the country, could then claim a refund of the VAT paid to its supplier, even though the VAT collected by the missing trader had never been paid to the tax authorities. Through this scheme, the suspects allegedly obtained fraudulent VAT refunds while avoiding the payment of VAT due to the tax authorities, generating illicit profits estimated at €100 million. The proceeds were subsequently laundered to conceal their criminal origin. The investigative measures were carried out under the supervision of the EPPO by law enforcement agencies in Austria, Croatia, Czechia, Germany and Poland. All persons are presumed innocent until proven guilty by the competent courts of law. 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. List of most important partners and national authorities involved: