Brussels (Brussels Morning) – The European Public Prosecutor’s Office’s ‘Kingdom’ investigation leads to the arrest of seven in the Netherlands for a €13 million VAT fraud scheme involving fake invoices and unlawful VAT assertions in Belgium.
An examination by the European Public Prosecutor’s Office in Brussels, code-named ‘Kingdom’, has led to the detention of seven suspects in the Netherlands, in an investigation into a €13 million VAT fraud.
What Prompted the ‘Kingdom’ Investigation by EPPO?
A Belgian associate of a Dutch company had requested a VAT reimbursement from the Belgian Treasury, amounting to €13.7 million. The requested amount was disbursed by the Belgian Treasury to several bank accounts held by the suspects. However, one of the banks suspected of scam and returned €3.7 million of this amount to the Treasury.
According to the investigation, the assertion to the Belgian Treasury was unlawful, as no actual goods were traded, and only fake invoices and deceitful VAT declarations were presented to the Belgian tax authorities.
The Dutch company, owned by the suspects, was known to the authorities in the Netherlands as a misplaced trader – an entity used for the exclusive objective of obtaining fraudulent tax refunds, taking benefit of EU rules on cross-border transactions between its Member States, as these are excused from VAT.
Some of the suspects – all living in the Netherlands at the time of these particulars– were already comprehended to law enforcement for similar violations in the country. It is understood that they chose to extend their activities to Belgium, in order to escape detection.
What Tactics Did the Suspects Employ to Evade Detection?
After this first VAT reimbursement in Belgium, the suspects tried to reproduce the scheme with the Belgian branch of another Dutch company, also held by them. This time, the suspects declared a refund of over €4 million, which was not paid out, as apprehensions had arisen.
Where Were the Illegal Profits from VAT Fraud Directed?”
Based on the proof, a substantial part of the illegal gains has been transferred to the United Arab Emirates, and the remainder has been utilised to purchase expensive cars, and luxury goods and for gambling in casinos.
What Were the Results of the May 23 Searches?
Searches were undertook on 23 May 2024 on the premises of businesses in the Netherlands, related to the alleged perpetrators of the fabrication, as well as in the houses of the suspects.
During the investigations, law enforcement officers captured luxury goods worth more than €200 000, €7 000 in cash and a car.
Moreover, in a previous national inquiry into money laundering involving some of the suspects, the FIOD and the Dutch Public Prosecutor’s office had grabbed two Porsches and one Lamborghini, as well as four bank accounts worth a blended total of €671 000. These assets are comprehended to have been acquired with part of the unlawfully acquired VAT refund from the Belgian Treasury and have therefore been grasped in the EPPO investigation, to compensate for the damage.
The EPPO is the autonomous public prosecution office of the European Union. It is responsible for examining, prosecuting and bringing to judgment offences against the financial interests of the EU.
