The European Public Prosecutor’s Office (EPPO) in Porto (Portugal) filed an indictment against 12 suspects and 15 companies, following an investigation into a massive intra community VAT fraud scheme extending to over 30 countries, code named Admiral.
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This is the first indictment issued under investigation Admiral.
The defendants ten Portuguese and two French nationals are accused of setting up and operating a criminal organisation, based on the sale of electronic goods, which is understood to have committed several crimes of aggravated tax fraud, money laundering and active and passive corruption in the private sector, between 2016 and November 2022.
Five of the accused are in pre trial detention, including one under house arrest. Fourteen companies registered in Portugal and one registered in Cyprus are also accused.
The defendants are alleged to have used a network of companies to evade the payment of VAT while trading in electronic devices, by using fraudulent invoices and tax declarations.
The fraudulent scheme took advantage of EU rules on cross border transactions between its Member States as these are exempt from value added tax by using a chain of traders that did not fulfil their tax obligations.
The suspects are also accused of channelling the illicit profits to bank accounts in non EU countries.
According to the evidence, in order to dissimulate the criminal origin of the profits, they also invested in real estate and in the sale of luxury products in the EU, amassing fortunes in the process.
The group is understood to have been assisted by a private banking manager among the accused in order to circumvent the rules in place to prevent and combat money laundering.
If found guilty, the defendants face up to 25 years in prison. The accused companies face financial fines and compulsory dissolution.
The estimated damage in Portugal alone amounts to over €80 million. The estimated losses to the EU, and to the national budgets of EU countries affected by the activities under investigation, under the Admiral investigation flagship, could amount to €2.2 billion.
The indictment follows a two year investigation led by the EPPO.
Working together across borders, European Prosecutors, European Delegated Prosecutors, the EPPO’s financial fraud analysts and representatives from Europol, Eurojust and national law enforcement authorities of 16 Member States were able to join the dots between a net of companies in Portugal and 9000 other companies, as well as more than 600 individuals located in different countries.
According to the Admiral investigation, the criminal activities were spread throughout over 30 countries.
These include 16 Member States that participate in the EPPO Belgium, Bulgaria, Cyprus, Czechia, Estonia, France, Germany, Greece, Italy, Lithuania, Luxembourg, the Netherlands, Portugal, Romania, Spain and Slovakia , as well as Hungary, Ireland, Poland and Sweden.
The reach extended to non EU countries including Albania, Antigua and Barbuda, China, Dubai, Hong Kong, Mauritius, Serbia, Seychelles, Singapore, Switzerland, Turkey, the United Arab Emirates, the United Kingdom and the United States.
On 29 November 2022, the EPPO, in cooperation with national law enforcement agencies, carried out simultaneous investigative measures in Belgium, Cyprus, France, Germany, Greece, Hungary, Italy, Lithuania, Luxembourg, the Netherlands, Portugal, Romania, Slovakia and Spain, including more than 200 searches.
As a result, 14 suspected ringleaders of the criminal scheme were arrested five of them remain in pre trial detention. The authorities also seized assets worth over €59 million, namely:
• 19 real estate assets, with a combined estimated value of €46 million
• 26 cars, with a combined estimated value of €1.4 million
• Over €2.2 million in cash
• Over €6.7 million in bank accounts
• 26 luxury watches, with a combined estimated value of €1.3 million
• 41 pieces of jewellery, with a combined estimated value of €48 000
• 23 pieces of branded goods, with a combined estimated value of over €90 000;
• Shares in companies worth €520 000
In Portugal, the investigation counted on the support of the Portuguese Judiciary Police (PolÃcia Judiciária), the Portuguese Tax Authority (Autoridade Tributária), and the Portuguese GNR (Guarda Nacional Republicana).
This investigation involved 22 of the EPPO’s European Delegated Prosecutors, coordinated by the EPPO’s central office.
Together, the European Delegated Prosecutors were able to design and implement a common investigative approach to an entire network of organised crime groups, without which an investigation of Admiral’s scale could not be conducted.
Suspects continue to be investigated in separate files, in Portugal and in other countries. ■