The European Public Prosecutor’s Office (EPPO) announced Thursday that it has dismantled a sophisticated criminal network involving cross-border value-added tax (VAT) fraud related to the import and sale of luxury vehicles. The scheme is estimated to have caused damages amounting to 100 million euros.
The investigation, codenamed “Javelin,” led to extensive searches across five countries: Austria, Croatia, Czechia, Germany, and Poland, supported by over 900 law enforcement personnel. Authorities made arrests in Germany and Austria, resulting in 13 people being detained, while more than 50 individuals are currently under investigation.
As part of the operation, assets valued at 26 million euros were seized. In Berlin, two properties, one of which includes a hostel, were secured, alongside seven properties located in Croatia. Authorities also froze numerous bank accounts, confiscated many vehicles (including luxury cars), as well as cash, crypto assets, a firearm with ammunition, and several luxury watches.
Evidence suggests that five alleged leaders and two tax consultants operated a VAT carousel starting at least in 2016. The illegal system exploited existing EU rules that exempt cross-border transactions within the EU from VAT. Companies in several EU states, including Austria and Czechia, were found to be selling luxury cars to firms in Berlin. These “missing traders” purchased the vehicles at net prices, without paying VAT, and subsequently disappeared without depositing the collected taxes with the authorities.
