Last week, the European Public Prosecutor's Office (EPPO) in Athens executed coordinated searches and seizures across Attica and the northern city of Kastoria, targeting a sophisticated VAT fraud network. The operation, supported by Greece's Internal Affairs Service of the Security Forces and the Digital Forensic Investigation and Analysis Subdirectorate, marks a significant step in dismantling a cross-border criminal enterprise that has defrauded the European Union and Greek budgets of at least €46.9 million.
How the Carousel Fraud Operated
At the heart of the case lies a classic VAT carousel fraud scheme, which exploits the VAT exemption on cross-border transactions within the EU. Between 2021 and 2025, suspects allegedly used a chain of so-called "missing traders"—companies created to trade small electronic devices, charge VAT to customers, and then disappear without remitting the tax to authorities. In some instances, they may have also claimed unlawful VAT refunds on goods for which the tax was never paid.
The investigation, launched nearly a year ago, uncovered a complex network of companies registered in Bulgaria, Cyprus, the Czech Republic, and Greece. These entities were used to trade small electronic devices across the EU, generating illicit profits that were then laundered through various channels. The scheme is estimated to have caused losses of at least €46.9 million in unpaid VAT, with an additional €24.2 million either unpaid or wrongly declared.
Greece has been a focal point for such fraud due to its strategic location and growing digital economy. The country's recent scaleup growth has attracted both legitimate investment and criminal exploitation.
Seizures and Digital Forensics
During the raids, authorities seized large volumes of documents, accounting records, and digital evidence, alongside €99,000 in cash and three luxury cars. More notably, the investigation led to the freezing of cryptocurrencies valued at roughly €900,000 and other digital assets worth approximately €4.5 million. Greek authorities described this as the largest seizure of digital assets ever carried out at the national level.
The assets were traced and frozen using advanced digital forensic analysis methods, designed to overcome complex digital obstacles. This highlights the growing sophistication of law enforcement in tackling financial crimes that increasingly rely on digital currencies and cross-border corporate structures.
Such operations are part of a broader European effort to combat tax evasion and money laundering. The EPPO, established in 2021, has been instrumental in coordinating cross-border investigations, particularly in cases like this that involve multiple member states.
Broader Implications for EU Tax Enforcement
VAT carousel fraud remains a persistent challenge for the EU, costing member states billions annually. The scheme's reliance on the VAT exemption for intra-community transactions makes it difficult to detect without close cooperation between national tax authorities and European bodies like the EPPO. This case underscores the importance of such collaboration, especially as criminals adopt more sophisticated methods, including the use of cryptocurrencies and shell companies across jurisdictions.
Greece, which has seen a surge in tourism and economic activity, remains vulnerable to such fraud. The country's tourism growth and expanding digital infrastructure create opportunities for both legitimate businesses and illicit networks. The EPPO's success in this case may serve as a deterrent, but it also highlights the need for continued vigilance and investment in forensic capabilities.
The investigation is ongoing, and further arrests or charges are expected as authorities analyze the seized evidence. For now, the operation sends a clear message: the EU is committed to protecting its financial interests, even as criminals adapt to new technologies and cross-border loopholes.
