VAT carousel traders arrested over €2m drinks fraud
A group of VAT carousel fraudsters involved in a multimillion-euro scam involving the EU drinks market and missing trader intra-community (MTIC) fraud have been arrested across Europe
24 Jun 2019
During a day of joint action coordinated by Eurojust, the EU’s Judicial Cooperation Unit, judicial authorities from Italy, Germany, Spain, Austria and Romania took down an organised crime group suspected of large-scale VAT fraud in the EU drinks market.
The total amount of tax evasion is estimated at almost €2m (£1.89m).
Seven suspects based in Italy, Austria and Romania were arrested, following the execution of pre-trial arrest warrants. Following numerous house searches in Italy, Germany, Austria and Romania, mobile phones and relevant documents were seized; and bank details and records as well as other criminal assets were identified.
Eurojust coordinated and supported the national authorities throughout the investigations. It also set up a coordination centre, which allowed for real-time exchange of information and facilitated the execution of European arrest warrants and European investigation orders.
Based on a report by Italian customs related to an Austrian drink company, the public prosecutor of Bolzano, Italy, initiated an investigation into alleged VAT fraud by organised criminals in the EU drinks market.
Starting in April 2015, the Austrian company supplied large quantities of beer and drink to Italian companies, which were formally represented by Romanian nationals. The Austrians received no VAT from the Italians, as no tax is due for intra EU transactions.
However, the Italian companies resold the drinks to other companies, charging them 21% VAT, which they did not remit to the Italian tax authorities.
By collecting the VAT, the Italian companies acted as missing traders in a typical carousel fraud scheme. Since June 2018, a German drink company also became involved in the scam, replacing the Austrian company.