Major operation: 13 arrests in million-dollar tax fraud involving luxury cars

Frankfurt. There have been arrests, searches and seizures in Germany and four other EU countries due to alleged tax fraud involving luxury cars worth millions. The European Public Prosecutor's Office (EPPO) in Luxembourg said 13 people were arrested in Germany and Austria. More than 50 suspects are being investigated. The authority assumes that the fraud caused damage worth an estimated 100 million euros.

More than 900 emergency services were involved in the searches on Wednesday in Austria, Croatia, the Czech Republic, Germany and Poland, it said. Authorities from Frankfurt, Baden-Württemberg and Berlin took part in the actions. Bank accounts were blocked and dozens of vehicles, cash, crypto assets, a firearm and luxury watches were seized. According to the announcement, two properties were confiscated in Berlin, including a property containing a hostel.

In the case, seven people - including two tax advisors - are said to have exploited EU regulations for at least ten years using a sophisticated system known as carousel fraud, according to which cross-border trade between EU member states is exempt from VAT.

Specifically, companies in Berlin are said to have imported luxury cars and paid the net price without sales tax. Through a network of companies and sometimes cross-border sales, the criminal network is said to have avoided paying taxes at one point and had them refunded elsewhere.

The European Public Prosecutor's Office (in English: Eppo) is the independent public prosecutor's office of the European Union. It is responsible for prosecuting crimes against the EU's financial interests and deals, among other things, with cases of tax fraud, money laundering, customs fraud or misappropriation of EU funds.