The European Public Prosecutor’s Office (EPPO) has announced a large-scale investigation into a sophisticated cross-border VAT fraud scheme worth an estimated €48 million, primarily affecting the electronics and mobile phone trading sector — a field closely watched by the gsmfeed community.

The operation, code-named Mela, led to over 100 searches and seven arrests in Germany. The investigation targeted a criminal network suspected of exploiting the margin VAT scheme by falsely declaring new mobile phones and other electronic devices as used goods. This manipulation allowed the perpetrators to pay VAT only on the profit margin rather than the full value — a regime meant exclusively for genuine second-hand goods.

According to the EPPO, the fraud spanned multiple European countries, including Germany, Czechia, Hungary, Ireland, Italy, the Netherlands, Romania, Spain, and the UK, where shell and intermediary companies were allegedly used to mask the true origin and status of goods.

In Germany alone, more than 300 officers from various tax and law enforcement agencies took part in the coordinated raids. Authorities seized cash, gold, luxury cars, jewellery, and mobile phones worth approximately €4 million.

For the global electronics trading community — especially those dealing in new and used devices — this case underscores the increasing vigilance of EU authorities toward VAT margin misuse. Traders are urged to maintain full transparency in supply chain documentation and ensure proper classification of goods (new vs. used) to avoid compliance risks.

All individuals arrested remain presumed innocent until proven guilty by a competent court.

Main Partners and National Authorities Involved:

1. Europol
2. Czechia: National Organised Crime Agency (NCOZ – Národní centrála proti organizovanému zločinu)
3. Germany: Criminal Police Inspectorate of Lower Franconia with the Bavarian Special Operations Support Unit (KPI(Z) Unterfranken mit Unterstützungskräften USK), Police Department Ludwigshafen (Polizeidirektion Ludwigshafen), Tax Investigation Offices of Nuremberg, Mainz and Neustadt (Steuerfahndungen Nürnberg, Mainz und Neustadt), and the State Office for Combating Financial Crime North Rhine-Westphalia (Landesamt zur Bekämpfung der Finanzkriminalität NRW)
4. Italy: Financial Police (Guardia di Finanza)
5. Romania: Directorate for Combating Organised Crime (Direcţia de Combatere a Criminalităţii Organizate)
6. Spain: Civil Guard (Guardia Civil)

Source : https://www.eppo.europa.eu/en/media/news/germany-over-100-searches-and-seven-arrests-probe-eu48-million-vat-fraud