Romanian companies, investigated by the European Public Prosecutor's Office for VAT fraud

Several companies from our country are being investigated by the European Public Prosecutor's Office (EPPO) for being part of an intra-community VAT fraud scheme, a scheme that includes companies from over 30 countries, according to a press release issued by the EPPO .

The investigation was started by the Portuguese prosecutors belonging to the EPPO who drew up an indictment concerning 12 suspects and 15 companies, based on the criminal investigations initiated two years ago in the European operation under the name Admiral.

The defendants - ten Portuguese citizens and two French citizens - are accused of setting up and operating a criminal organization based on the sale of electronic goods and are alleged to have committed several crimes of aggravated tax fraud, money laundering and active and passive corruption in the private sector, in period 2016-2022. Five of the accused were remanded in custody, one of whom is under house arrest, according to the cited press release.

In the same file, the European prosecutors put 14 companies registered in Portugal and one registered in Cyprus under criminal investigation. According to prosecutors, the defendants would have used a network of companies to evade paying VAT during transactions with electronic devices by using fraudulent invoices and tax returns. The fraudulent scheme took advantage of EU rules on cross-border transactions between its member states - as they are exempt from value added tax - by using a chain of traders who defaulted on their tax obligations. The suspects are also accused of channeling the illicit profits to bank accounts in non-EU countries. According to the evidence, in order to disguise the criminal origin of the profits, the sums obtained by them were invested in real estate and in the sale of luxury products in the EU. Prosecutors allege that the group was assisted by a private banking manager to circumvent anti-money laundering regulations. If convicted, the defendants face up to 25 years in prison. Accused companies face financial fines and liquidation.

The estimated damage in Portugal alone amounts to more than 80 million euros. The estimated losses to the EU and to the national budgets of the EU countries affected by the activities under investigation, under the flagship of the Admiral investigation, are estimated at euro2.2 billion.

The indictment follows a two-year investigation led by the EPPO. Working together across borders, European Prosecutors, European Delegated Prosecutors, EPPO financial fraud analysts and representatives from Europol, Eurojust and national law enforcement authorities from 16 Member States managed to connect the dots between a network of companies in Portugal and 9,000 others of companies, as well as over 600 people located in different countries.

According to the Amiral investigation, criminal activities were spread across more than 30 countries. These include 16 member states participating in the EPPO - Belgium, Bulgaria, Cyprus, the Czech Republic, Estonia, France, Germany, Greece, Italy, Lithuania, Luxembourg, the Netherlands, Portugal, Romania, Spain and Slovakia - as well as Hungary, Ireland , Poland and Sweden. Coverage has expanded to countries outside the EU - including Albania, Antigua and Barbuda, China, Dubai, Hong Kong, Mauritius, Serbia, Seychelles, Singapore, Switzerland, Turkey, United Arab Emirates, United Kingdom and 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 over 200 raids. As a result, 14 suspected leaders of the criminal scheme were arrested - five of them remain in pretrial detention. The authorities also confiscated assets worth over 59 million euros, namely:

- 19 real estate assets, with an estimated value of 46 million euros

- 26 cars, with a combined estimated value of 1.4 million euros

- over 2.2 million euros in cash

- over 6.7 million euros in bank accounts

- 26 luxury watches, with an estimated value of 1.3 million euros

- 41 pieces of jewelry, with an estimated value of 48,000 euros

- 23 branded products, with an estimated value of over 90,000 euros

- shares in companies worth 520,000 euros.

This investigation involved 22 of the EPPO's European Delegated Prosecutors, coordinated by the EPPO's central office, who designed and implemented a common investigative approach to an entire network of organized crime groups, without which an investigation of the scale of Operation Admiral.

The suspects continue to be investigated in separate cases in Portugal and other countries.