Following an investigation by the European Public Prosecutor’s Office (EPPO) in Frankfurt am Main (Germany), two suspects were convicted last week (15 February 2023) by the Frankfurt Regional Court (Landgericht Frankfurt) of VAT fraud. One of the two accused was sentenced to 5 years and 9 months of imprisonment, and the other was sentenced to two years on probation.
The first offender was part of an organisation that achieved fraudulent VAT repayments of more than €33 million, by trading in Voice over Internet Protocol (VoIP) services. He was acting as the manager of companies, which were purely fictitious. The companies’ sole purpose was to issue invoices enabling the recipient of the invoices – another fictitious company – to claim input tax from the tax authorities, without justification.
Moreover, the first offender also acted as the de facto managing director of another company involved in the trade of electronic goods. As with the VoIP transactions, the trade did not take place as the invoices had shown. The company of the defendant only drew up invoices, forwarded payments and acted as the contact point in Germany for the presumed main organisers of all the supply chains of the electronic goods, operating from the UK. Between April 2018 and March 2021, the de facto managing director neither declared nor paid taxes on the listed transactions from his electronic goods company.
