The Directorate of Economic Police proceeded to dismantle a criminal organization.
In particular, the members of which acted by establishing non-existent companies, through which virtual transactions and expenses of tens of millions of euros were carried out.
According to ELAS, the members of the organization, since 2019, were involved in complex procedures with the aim of deceiving the State through the non-return of VAT, proceeding to interbank transfers of sums of money for pretense payment of transactions.
In order to deconstruct the criminal organization, after a months-long investigation under the supervision of the Hellenic Office of European Mandated Prosecutors, an extensive police operation was organized and implemented last Thursday, with the assistance of police officers from the Directorate of Criminal Investigations, the Attica Security Directorate and the Electronic Prosecution Directorate Crime, during which 21 members of the organization were arrested, including three who allegedly had a leadership role.
A case file was filed against them for criminal organization, forgery against the Greek public, cross-border VAT fraud with a loss of VAT resources exceeding 10,000,000 euros, by complicity and by continuation, money laundering from criminal activities, as well as for violating the arms and drug law. The file also includes 41 people accused of the same crimes.
It was preceded by a relevant conclusion of the Authority for Combating the Legalization of Income from Criminal Activities, while the investigation of the case revealed that the members of the criminal organization had joined it with distinct roles, having an operational infrastructure for the purpose of carrying out fictitious transactions and illegally returning VAT.
As emphasized in the announcement of ELAS, in order to achieve their purpose, the key members were structured into two subgroups, which acted in coordination, having installed themselves covertly in different places in Attica, while taking the corresponding measures to avoid their disclosure ( continuous establishment of new legal entities, use of virtual networks and “strawman” telephone connections, physical transfer of money, etc.).
In more detail, as to the way the organization operates:
• Establishment of shell companies: The members of the organization established “front” companies without real commercial activity in Greece, Cyprus and Slovakia. In these companies, people of low socio-economic status, such as unemployed and dependent persons, were declared as managers, with the aim of hiding the identity of the real managers. Indicative of the scope of their activity and infrastructure, is the fact that one of the two subgroups is allegedly linked to the establishment of at least 430 virtual entities or to legitimate operations.
• “Carousel” fraud: The organization ran a complex scheme of “carousel fraud” in VAT, taking advantage of intra-Community transactions and the VAT non-return regime on sales within the EU. These companies operated as “missing traders” ) who declared fictitious transactions to illegally collect VAT or claim refunds.
• Money Laundering: Profits from tax evasion were trafficked through the bank accounts of shell companies, making fictitious bank transactions and cash withdrawals. The perpetrators used encrypted networks (VPNs) and anonymous sim cards, while physically transferring money from regional members of the organization to conceal the origin of the illicit proceeds.
• VAT returns.: Members of the organization submitted false or inaccurate or incomplete VAT returns and proceeded to obtain fictitious invoices to create fictitious VAT refund claims. Through this method, the organization managed to illegally extract from the state an amount of more than 4.4 million euros in VAT refunds.
• Recruiting peripheral members: Central members recruited people with low incomes and criminal backgrounds to place them as managers of the virtual businesses. The regional members acted as “personal tools” to cover the organization’s activities in cross-border VAT fraud, the banking and collection of the relevant proceeds and the laundering of the illicit proceeds. A characteristic of the last case is that these companies were not related to the companies that belonged to the range of activities of the organization, while they themselves had different objects of business activities, for the purpose of declaring virtual transactions.
At the same time, the leading members of the organization sought to avoid any obvious evidence of their association with the virtual businesses and their managers, in order to avoid legal consequences against them, as the obligation to return VAT output was transferred to the specific entities, while at the same time the legitimate businesses in which the members participated, balanced the input-output VAT, thus depriving the State of the possibility to recover the lost revenue.
In total, through the corporate formations created by the members of the criminal organization, they achieved the loss of VAT resources amounting to more than 26,000,000 euros, for which fictitious transactions of more than 150,000,000 euros had been declared.
In addition, a subgroup of the organization developed action outside of this context, where with the same method it proceeded through the creation of a system of companies in cross-border VAT fraud amounting to millions of euros, for the benefit of a company active in e-commerce.
Also, a key member of the organization succeeded in the fraudulent disbursement of money through the refundable advance measure for seven businesses he managed, obtaining an illegal benefit of approximately 770,000 euros.
In order to dismantle the organization, 39 searches were carried out (in houses, businesses, vehicles, bodies), in which, among other things, the following were found and confiscated:
• 139,696 euros and a banknote counter,
• luxurious I.X.F.,
• 10 particularly valuable wristwatches,
• 62 seals of legal entities,
• 46 mobile phones,
• 7 laptops and tablets,
• pistol with 2 magazines,
• a number of delivery notes, invoices, tax receipts and handwritten notes,
• bank documents, cards, checks and check books of Greek and foreign credit institutions,
• small amount of drugs,
• obviously fake identity card issued by foreign Authorities,
• 2 POS machines and
• a large number of external hard drives and portable digital data storage media (USB STICKS), while digital evidence was extracted for further investigation of their contents.
It is noted that, in the context of the investigation, a number of elements were taken into account from the collection and processing of tax, accounting and banking data (opening of bank accounts of 230 entities), the analysis and correlation of numerous electronic traces, the execution of special investigative acts (removal of communications for a total of 85 telephone connections and recording of 179,450 telephone conversations), the processing and description of video footage and the processing of voluminous correspondence (780 outgoing documents for data collection).
According to ELAS, the Directorate of Criminal Investigations also had a decisive contribution to the investigation of the case by sending 12 specialist digital data researchers of the Digital Evidence Examination Department, who, using modern forensic tools and technical intelligence applications, discovered and correlated critical evidence during the field investigations, among millions of digital data stored both locally and in the cloud.
The seized digital data will be further analyzed by the laboratory of the Digital Evidence Examination Department.
Also, according to the protothema, the important factor for the successful completion of the research was the cooperation and response of the AADE Services, as well as the credit institutions in providing data.
Those arrested, with the case file filed against them, were taken to the Greek Office of the European Public Prosecutors and referred to an Investigator.
Finally, ELAS reminds that citizens can contact, anonymously or by name, the telephone number 11012 or the website of the Greek State (gov.gr) “Complaint for financial crimes”, to provide information or report illegal and interfering actions or activities against the sector of the economy, public property, as well as social and insurance welfare and rights.
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#members #stole #million #VAT
Table of Contents
- 1 Here are some People Also Ask (PAA) questions related to the topic “Dismantling of a Criminal Organization: A Success Story in Combating VAT Fraud”:
- 2 Here are some People Also Ask (PAA) questions related to the title “The Directorate of Economic Police Dismantles a Sophisticated Criminal Organization”:
Dismantling of a Criminal Organization: A Success Story in Combating VAT Fraud
In a recent operation, the Directorate of Economic Police successfully dismantled a criminal organization involved in extensive cross-border VAT fraud, resulting in a loss of VAT resources exceeding €26 million. The organization, which had been operating since 2019, was responsible for creating shell companies, submitting false VAT returns, and engaging in money laundering activities to evade taxes.
The investigation, which was carried out under the supervision of the Hellenic Office of European Mandated Prosecutors, uncovered a complex scheme of “carousel fraud” in VAT, where the organization took advantage of intra-Community transactions and the VAT non-return regime on sales within the EU. The members of the organization established “front” companies without real commercial activity in Greece, Cyprus, and Slovakia, and recruited people with low incomes and criminal backgrounds to act as managers of these virtual businesses.
The organization’s modus operandi involved submitting false or inaccurate VAT returns, obtaining fictitious invoices, and claiming refunds. They also used encrypted networks and anonymous sim cards to conceal their activities and launder the illicit proceeds through bank accounts of shell companies.
The investigation, which involved 39 searches and the seizure of digital evidence, resulted in the arrest of 21 members of the organization, including three alleged leaders. The seized digital data will be further analyzed by the laboratory of
The Directorate of Economic Police Dismantles a Sophisticated Criminal Organization
In a major breakthrough, the Directorate of Economic Police has successfully dismantled a large-scale criminal organization that had been operating in Greece since 2019. The organization, whose members were arrested in a coordinated police operation, was involved in complex financial crimes, including VAT fraud, money laundering, and forgery.
Modus Operandi
The criminal organization operated by establishing shell companies in Greece, Cyprus, and Slovakia, which were used to carry out virtual transactions and expenses amounting to tens of millions of euros. The members of the organization used these companies to deceive the state and avoid paying Value-Added Tax (VAT), instead, using the funds for their own personal gain.
To achieve their goals, the key members of the organization were structured into two subgroups, which acted in coordination, using tactics such as continuous establishment of new legal entities, virtual networks, and “strawman” telephone connections to avoid detection. They also physically transferred money to conceal the origin of the illicit proceeds.
VAT Fraud and Money Laundering
The organization ran a sophisticated scheme of “carousel fraud” in VAT, taking advantage of intra-Community transactions and the VAT non-return regime on sales within the EU. They declared fictitious transactions to illegally collect VAT or claim refunds, resulting in a loss of VAT resources exceeding 10 million euros.
The profits from tax evasion were laundered through the bank accounts of shell companies, making fictitious bank transactions and cash withdrawals. The perpetrators used encrypted networks (VPNs) and anonymous sim cards to conceal their activities.
Recruiting Peripheral Members
Central members of the organization recruited people with low incomes and criminal backgrounds to act as managers of the virtual businesses. These regional members were used as “personal tools” to cover the organization’s activities in cross-border VAT fraud, banking, and collection of the relevant proceeds, as well as money laundering.
Police Operation
After a months-long investigation under the supervision of the Hellenic Office of European Mandated Prosecutors, an extensive police operation was organized and implemented, resulting in the arrest of 21 members of the organization, including three with alleged leadership roles. A case file was filed against them for criminal organization, forgery against the Greek public, cross-border VAT fraud, money laundering, and violating the arms and drug law.
Conclusion
The successful dismantling of this criminal organization is a significant achievement for the Directorate of Economic Police and a testament to their dedication to combating financial and economic crime. The investigation and subsequent police operation highlight the importance of international cooperation in fighting cross-border crime and protecting the financial integrity of the European Union.
International Efforts to Combat Financial Crime
The European Union has recognized the need to combat financial and economic crime, which is why Europol has established the European Financial and Economic Crime Centre (EFECC) to enhance its operational and strategic support in preventing and combating financial and economic crime in the EU [[1]]. Similarly, the Directorate General of National Police (DGPN) is involved in monitoring and assessing financial issues, as well as responsible research and innovation [[2]]. National police forces, such as the Central Directorate of the Judicial Police in France, also play a crucial role in investigating and fighting serious crime [[3]].
In the fight against financial and economic crime, international cooperation and coordination are essential in disrupting and dismantling criminal organizations. The success of the Directorate of Economic Police in this case serves as a model for effective collaboration and underscores the importance of continued efforts to combat financial crime in the EU.
References
[1] European Financial and Economic Crime Centre (EFECC). (n.d.). Europol. https://www.europol.europa.eu/about-europol/european-financial-and-economic-crime-centre-efecc
[2] Directorate General of National Police (DGPN). (n.d.). Era-learn. https://www.era-learn.eu/network-information/organisations/directorate-general-of-national-police
[3] Central Directorate of the Judicial Police. (n.d.). Wikipedia. https://en.wikipedia.org/wiki/CentralDirectorateoftheJudicial_Police
