Italian mafiosi funneled fraudulent funds through Prague-based companies as part of a Europe-wide €520 million VAT scam, investigators have found.
The European Public Prosecutor’s Office (EPPO) revealed late last year that police across the EU had issued 43 arrest warrants and were investigating nearly 200 individuals and 400 companies linked to the scheme.
Now, Czech Television (ČT) has revealed how Prague firms were reportedly used as intermediaries that enabled the mass tax fraud, which Italy-based investigators say was driven by several mafia clans.
Among the companies named was B2B Computer, which allegedly bought electronics tax-free and resold them using fraudulent invoices, ČT reported.
The fraud exploited the EU’s VAT-free cross-border trade, where businesses can buy goods tax-free in one EU country and resell them elsewhere.
Criminals claimed VAT refunds on phantom transactions before disappearing.
Czech tax official Jiří Žežulka told ČT: “The VAT declaration system is being abused.
“Goods are purchased tax-free and should be taxed in the country of consumption. But in this case, companies vanished before paying.”
Deals were reportedly struck at Prague’s Royal Hotel, with one firm, Otaro Trading, linked to a director of over 700 Czech companies.
ČT identified two key intermediaries, Rodolphe Ballaera and Paolo Falavigna, as alleged links between the Camorra and semi-legal businesses.
Now, Czech Television (ČT) has revealed how Prague firms were reportedly used as intermediaries that enabled the mass tax fraud, which Italy-based investigators say was driven by several mafia clans.
Among the companies named was B2B Computer, which allegedly bought electronics tax-free and resold them using fraudulent invoices, ČT reported.
The fraud exploited the EU’s VAT-free cross-border trade, where businesses can buy goods tax-free in one EU country and resell them elsewhere.
Criminals claimed VAT refunds on phantom transactions before disappearing.
Czech tax official Jiří Žežulka told ČT: “The VAT declaration system is being abused.
“Goods are purchased tax-free and should be taxed in the country of consumption. But in this case, companies vanished before paying.”
Deals were reportedly struck at Prague’s Royal Hotel, with one firm, Otaro Trading, linked to a director of over 700 Czech companies.
ČT identified two key intermediaries, Rodolphe Ballaera and Paolo Falavigna, as alleged links between the Camorra and semi-legal businesses.
‘Unprecedented’ VAT fraud
Announcing in November that tens of arrest warrants had been issued, the EPPO said the “complexity and efficiency of this criminal syndicate committing VAT carousel fraud is unprecedented.”
Police officers were conducting investigations – under the umbrella name “Moby Dick” –in several EU countries, including Italy, the Czech Republic, Slovakia, the Netherlands and Spain, and had frozen assets worth €520 million.
“It has been a while since we started to ring the alarm bell about dangerous organized crime groups’ heavy involvement in fraud to the EU budget,” the chief prosecutor Laura Kövesi said at the time.
“‘Moby Dick’ shows that there are now two separate criminal worlds. The world of the really bad and dangerous criminals smuggling drugs, trafficking people on one side; and the world of white-collar criminals, ‘merely’ corrupting and laundering money, on the other side.”
Police officers were conducting investigations – under the umbrella name “Moby Dick” –in several EU countries, including Italy, the Czech Republic, Slovakia, the Netherlands and Spain, and had frozen assets worth €520 million.
“It has been a while since we started to ring the alarm bell about dangerous organized crime groups’ heavy involvement in fraud to the EU budget,” the chief prosecutor Laura Kövesi said at the time.
“‘Moby Dick’ shows that there are now two separate criminal worlds. The world of the really bad and dangerous criminals smuggling drugs, trafficking people on one side; and the world of white-collar criminals, ‘merely’ corrupting and laundering money, on the other side.”
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