Three arrested in Cyprus in €114 million cross-border VAT fraud investigation
Five arrests were made across Cyprus, Germany and Italy in a European Public Prosecutor’s Office investigation into alleged VAT fraud involving smartphone sales.
Munich, Germany. An investigation into suspected cross-border VAT fraud totalling €114 million led to five arrests this week, including three in Cyprus, according to the European Public Prosecutor’s Office. The arrests took place across Cyprus, Germany and Italy following a request from the office in Munich.
Smartphone sales under investigation
The office said the suspected criminal organisation operated a complex scheme involving smartphone sales through shell companies in Sweden, Albania and Germany. Investigators allege that the network exploited EU provisions allowing transactions between member states to qualify for VAT exemptions under certain conditions.
The estimated losses in tax revenue were €34 million for Germany and €80 million for Sweden, the office said. Those arrested are suspected of establishing and directing the network.
Searches and asset seizures
According to the office, investigators conducted 12 searches at suspects’ homes and at business premises linked to suspects and companies being investigated. They also froze assets valued at up to €80,000 and seized vehicles, property and bank accounts across Italy, Cyprus and Greece.
The office said the case falls within its broader Midas investigation framework, which examines cross-border VAT fraud cases.
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