Research Mida. Credit: X @euprosecutor
A fourth conviction was made in a VAT fraud scheme of 195 million euros across 17 countries. Midas investigation.
The Covid face masks were reportedly sold to Germany’s own health ministry using a fake Hong Kong company. On July 15, 2025, the man was sentenced to 18 months by a German court for his role in one of the biggest cross-border tax frauds in the EU to date.
Huge VAT scams exploited EU tax loopholes
What is called Midas The cases led by the European Prosecutor’s Office (EPPO) focus on VAT Carousel fraud. There, before the goods move tax-free across the EU and then disappear from the book.
According to Eppo, the convicted man acted as director of a missing trader company who helped steal about 1 million euros of stealing on VAT.
The investigation revealed a network of shell companies, fake identities and fictitious invoices, allegedly used to sell smartphones, electronic devices, and personal protective equipment (PPE) during the pandemic.
Covid Face Masks Fake China Firm
One of the bravest elements of this scheme involved a protective face mask purchased in 2020 by the German Federal Ministry of Health. The EPPO revealed that the province unconsciously purchased masks from a company that pretends to be based in Hong Kong. In fact, the goods did not leave Germany.
At the start of the supply chain, along with the fake Hong Kong front, failed to refund VAT after sale, resulting in direct loss of taxpayer money.
The full scale of fraud was searched in February 2024 in 17 countries and published below.
- 14 arrests
- Over 15 million euros of smartphones have been seized
- 3 million euro yacht, luxury watch, 1.2 million euro cash and crypto
- Multiple high-end cars including Rolls-Royce, BMW and Range Rover
- 2.5 kg of gold and designer jewelry
The suspect allegedly used encrypted communications, a buffer company and a straw man to protect the surgery.
EU-wide investigations have now been made possible through the power of the EPPO to coordinate cross-border behaviour at high speed. I received support from:
- Europole
- Eurojust
- Germany: Tax Investigation Bureau (Berlin, Bielefeld, Cottbus, Munster, Nuremberg), Police HQ (Northern Hesse, Brandenburg), State Criminal Police (Berlin and Brandenburg)
- UK: Revenues and Customs under Her (HMRC)
- Italy: Guardia Di Finanza (GDF)
- Austria: Fraud Management Office (Figure)
- Cyprus: Cyprus Police Department
- Czech Republic: National Organized Crime Agency (NCOZ)
- Estonia: Estonia Tax and Customs Committee (EMTA)
- Malta: Financial Crime Investigation Division (FCID)
- Netherlands: Financial Information and Research Services (FIOD)
- Poland: Warsaw Police Economic Crime
- Portugal: Republican National Guard (GNR)
- Sweden: Swedish Economic Crime Bureau (SECA)
- Slovakia: National Criminal Agency (PPZ)
- Albania: Special Prosecutor’s Office for Corruption and Organized Crime (SPAC)
- Slovenia, Hungary and Croatia also participated in the project.
Despite the massive scale of fraud and confirming the involvement of the Ministry of National Health, no investigations have been reported regarding government oversight or regulation failures.
There have been only four convictions so far, but serious questions remain as to who else remains unharmed.
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