Carousel fraud ring involving fictitious companies caused a VAT loss of over €10 million – The money laundering through Jaguar, Porsche & luxury vacations

A mammoth criminal case for cross-border fraud with a loss of revenue for the Greek state of more than €10 million, has been brought before the Greek authorities. Following a thorough investigation by the Money Laundering Authority and the Economic Police, an big network of virtual companies that “traded” electronic and telecommunications equipment, perfumes, cosmetics, watches, commercial electric vehicles, business and household goods, etc. for the sole purpose of “issuing fictitious invoices” came to light.

The proceeds from the illegal activities of the “criminal organization” are literally staggering and according to the evidence in the case file, in order to launder them they were investing in luxury vehicles such as Porsche and Jaguar, buying real estate and lavish vacations.

Already, 11 of the 21 arrested were remanded in custody last week after their pleas to the “eEuropean interrogator”, while the total number of accused is 62. The file that has been formed consists of thousands of pages and includes “fire evidence” about the defendants and revealing conversations about their activities.

The long list of offences that have been charged against the defendants by the European prosecutor’s office includes, on a case-by-case basis, criminal organisation, forgery against the public, money laundering, etc.

In the fraud under investigation, however, against the Greek public and against the interests of the EU (which is why the case file was forwarded to the European Public Prosecutor’s Office), the central role appears to be played by a one-person who “participated in high-risk unusual transactions by importing from EU countries (intra-Community acquisitions) products worth millions of euros through third domestic legal entities (buffers), which then disappear without refunding the corresponding VAT”.

Subsequently, the company in question “methodically” appears “to promote in cooperation with third domestic companies the products either to the final consumer, without the VAT being refunded again, or exports them to EU countries (intra-Community supplies), requesting (the third domestic companies) a subsequent VAT refund”. As stated in the case file “all the above transactions take place through successive sales for which there are reasonable indications of a case typology with characteristics of a virtual transaction scheme (carousel scheme form) and fraud of the ‘disappeared trader’ type”.

The case was initially brought to the European Public Prosecutor, after a thorough investigation by the money laundering authority and the financial police, and the most notable thing is that the above illegal transactions involved hundreds of…ghost companies. Companies, that is, that had neither employees nor facilities but many of them had as managers and representatives, unemployed, elderly, drug addicts and even persons with a criminal past.

According to the documentation, at least three of the accused had a leading role in the criminal organization, whose activities were traced from the beginning of March 2019. Among them was the one-person company in which all the illegal proceeds ended up. This company, as it is mentioned, “after mixing its products with other domestic markets, it moved them again through a network of either disappeared legal entities or re-distributed them abroad through other companies of the circuit, in the form of intra-Community deliveries, requesting the latter the VAT refund”.

At least two sub-groups were operating under the leading members of the organisation and it is indicative that one of them is “charged” with setting up at least 430 fictitious entities with a legal function. The activities of the ring extend to Greece, Slovakia and Cyprus, while 230 bank accounts were opened and assets of those involved were seized in the course of the investigations that preceded them.

“In total, through the corporate formations created by the members of the organization during the period from 2019 to 30/4/2024, aiming to increase the assets of their property, non-existent transactions were declared, with the issuance of fictitious tax documents with a net value of 153,973,603, 47 euros and VAT. At the same time, applications for the refund of a credit balance of VAT in the total amount of 5,479,813.03 euros were submitted for goods for which in none of the previous stages of the purchase and sale chain the VAT was not refunded.

Leisure with Jaguar and luxury travel

The same document, however, also describes how a portion of the accused attempted to “legalize” the illicit gains. As noted, those involved in the case were laundering black money by investing in real estate purchases, traveling to luxury destinations, expensive cars and cash withdrawals “in order to make it difficult to further dispose of the money.”

Indicatively, it is reported that from the account of one of the numerous companies, “61 cash withdrawal transactions totaling 825,000, 00 euros” were identified within a period of just three months. Even defendants in the case appear to proceed either in the purchase of luxury vehicles or in the conclusion of long-term lease agreements. These are an electric Mercedes brand vehicle purchased in 2022 worth 55,980, 00 euros, Land Rover vehicles and a Jaguar F-Pace allegedly driven by the representative of the one-person Ltd. that reaped the large “profits” from the illegal transactions of the network. In fact, for the same person it is reported that in 2022 he proceeded to purchase a property in the southern suburbs of Athens of 300 square meters “for a price of 320,000,000 euros, legalizing proceeds from criminal activities”.

Furthermore, the vehicle lease agreements included a Porsche Macan GTS, a Porsche Carrera, Alpa Romeo, and other vehicles. Finally, as mentioned, the money from the VAT refund was also being channeled to buy luxury goods and expensive holidays. As an indication, it suffices to mention that from the account of the investigated company “charges for luxury goods and services, e.g. in the amount of 73,524, 20 euros, were made through 320 purchase transactions using a debit card, which were presumed to be related to the payment of airline tickets, payments to shops and hotels in Turkey, payments to the “Costa Navarino”, payments to branded shops and hotel in Austria”.

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