BRUSSELS — EU prosecutors announced Thursday they are probing a €520 million VAT fraud involving “several” mafia groups.
The European Public Prosecutor’s Office (EPPO) revealed the investigation — code-named “Moby Dick” — led to 160 searches being carried out Thursday in several EU countries, including Bulgaria, Croatia, Cyprus, Czechia, Italy, Luxembourg, the Netherlands, Slovakia and Spain, as well as in non-EU countries.
The investigation is focused on Italy’s brutal Camorra and Cosa Nostra mafia groups, according to a person familiar with the probe who was granted anonymity to discuss sensitive details.
In Italy alone, prosecutors froze 129 bank accounts and seized 192 real estate properties, along with 44 luxury cars and boats, the EPPO’s statement said.
Accused criminals issued invoices worth more than €1.3 billion to trade goods through a fraudulent chain in which companies would claim reimbursements from national tax authorities in a scheme known as “VAT Carousel fraud.”
According to the EPPO, Europe is losing around €50 billion per year to this type of financial criminality, which then funnels money into other types of criminal activity. For comparison, the bloc’s illegal drug trade is valued at around €30 billion annually, according to the EU Drugs Agency.
“’Moby Dick’ is a defining investigation for the EPPO,” said Chief Prosecutor Laura Kövesi. “It has been a while since we started to ring the alarm bell about dangerous organized crime groups’ heavy involvement in fraud to the EU budget. Beyond the colossal damages that they create, we have been warning about the threat to our internal security their activity in this field represents. We now shed light on a first such big case.”
EPPO, tasked with investigating serious financial crimes against the EU’s interests, has for three years repeatedly targeted criminal organizations operating those schemes as a way to prevent them from expanding.
Prosecutors said a freezing order of more than €520 million is being executed to compensate the damage to the EU and national budgets.
“Moby Dick” shows that there are not two separate criminal worlds,” Kövesi added. “The world of the really bad and dangerous criminals smuggling drugs, trafficking people on one side; and the world of white-collar criminals, ‘merely’ corrupting and laundering money, on the other side.”
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