EUROPOL: Authorities intercept two separate criminal laundering networks; multiple arrests and millions in assets seized - AML Intelligence
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EUROPOL: Authorities intercept two separate criminal laundering networks; multiple arrests and millions in assets seized

By Dan Byrne for AMLi

HUNGARIAN AUTHORITIES have dismantled an organised criminal group thought to be responsible for more than €8.2M in tax fraud.

Nine suspects were arrested during 100 different searches in a coordinated operation across Hungary and Croatia on 2nd March last, Europol said in a statement Wednesday.

Several bank accounts have also been frozen and properties worth €4.16M have been seized.

The alleged criminals are thought to have defrauded the Hungarian government of such a large amount of tax through a ‘missing trader’ scheme – a common fraud and laundering technique seen in several Europol-related criminal crackdowns.  

Essentially, these schemes exploit the EU’s rule that the movement of goods between member states is VAT-free.

Traders will sell goods in one jurisdiction and abscond to another without paying VAT that is rightly owed in the first.

“The OCG [Organised Criminal Group] used ‘missing traders’ based in Hungary and Croatia,” Europol’s statement read.

“As part of the scheme, the beneficiary companies received fictitious invoices and transferred funds to the ‘missing traders’ on a monthly basis. The criminal proceeds were then withdrawn and returned in cash to the representatives of the company initiating the transfer.”

Europol advised that this type of ‘missing trader’ scheme – which they have called ‘invoice mills’ is becoming increasingly common in Europe.

It forms part of a criminal industry that claims around €60BN per year from national tax authorities, it added, which was done either through avoiding VAT payments altogether, or corruptly claiming repayments of VAT later on.

ARRESTS IN GERMANY AND LUXEMBOURG

Also from Europol today; German and Luxembourg authorities have carried out a “coordinated blow” on a criminal network set up to launder the profits of drugs traded throughout the EU.

Four members of the network have been arrested across fourteen searches in both jurisdictions. One of them is believed to be the network’s leader – nicknamed “The Minister”.

Properties and other assets with a combined value of “several million of euros,” have been seized, in addition to €187,000 in bank deposits frozen.

Both authorities’ actions came at the request of colleagues in France, more specifically Lille’s Interregional Specialised Prosecution Service (JIRS).

“The investigation began in France in 2017 after customs agents found £225 990 inside a lorry owned by a company registered in Luxembourg,” Europol said in a statement.

“A cocaine seizure made in France in 2019, and the ensuing information exchange, pointed authorities to the possible links between the two seizures.”

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