Over 30 cars & €900,000 seized in the Netherlands as part of major EU VAT fraud case

Authorities in the Netherlands and France seized dozens of cars and over a million euros in cash as part of an investigation into VAT fraud involving automotive sales. In the Netherlands alone, 34 vehicles were seized, and over 900,000 euros in cash. Officials searched multiple locations over a six-day period that ended on Monday, the European Public Prosecutor’s Office (EPPO) said.

The investigation revolves around companies that tried to sell new vehicles as second-hand units. The EPPO, which led the investigation, said such automotive sales are a fraudulent way to pay a reduced amount of VAT. Damages were estimated at 19 million euros as a result of the scheme, with France losing out on 13 million euros in VAT, and the Netherlands losing out on 6 million euros.

“When selling legitimate second-hand vehicles, car companies only have to pay VAT on the margin they make,” the EPPO said. They do not have to collect VAT for the net value of a used car.

”According to the investigation, cars were bought from legitimate dealers in Germany by Dutch companies. The vehicles were then sold to shell companies (‘missing traders’) in France, and then bought back again,” the EPPO said. “Ultimately, the cars were sold to private persons and companies in several EU countries (mostly France and the Netherlands) as second-hand vehicles. It is presumed that false invoices were used in this fraud.”

The Dutch financial crimes service FIOD searched 14 different locations in the Netherlands, and formally asked counterparts in Germany to search other locations. A total of “34 cars were seized, as well as luxury goods and more than €900,000 in cash,” the EPPO stated.

Searches took place at homes and commercial properties in several cities, including Amersfoort, The Hague, Eindhoven, Enschede and Nijkerk. Authorities in Germany also investigated four properties. Searches were also carried out at four locations in Germany. The sprawling case covered dozens of locations elsewhere, including Portugal and France. “Given the nature and scope of this fraud, there is not only a suspicion of VAT fraud and forgery, but also of organized crime,” FIOD said.

Ten searches were also carried out at homes and car dealerships linked to suspects in France. “Six vehicles, including luxury brands such as Mercedes and Audi, were seized, as well as €114,000 in cash and on bank accounts.” Two of the arrests were made in France on accusations of fraud and money laundering as part of an organized crime scheme. They have both been remanded into pre-trial detention, according to EPPO.