Italian Mafia ‘Moby Dick’ Tax Fraud Results in Arrest of 43 Individuals and $550 Million Seized
The European Public Prosecutor’s Office stated that multiple mafia groups were implicated in an intricate carousel fraud scheme involving value-added tax, a type of sales tax.
Law enforcement in Europe apprehended 43 individuals suspected of participating in a 520 million euro ($549 million) tax fraud scheme allegedly orchestrated by various Italian mafia organizations.
The European Public Prosecutor’s Office (EPPO) in Milan and Palermo, with the support of Europol and national law enforcement agencies, conducted an investigation titled “Moby Dick.”
This fraud revolved around the trafficking of laptops, wireless earphones, and other electronic devices.
It was revealed on Thursday that the operation resulted in the arrest of 43 individuals across Italy, Spain, Bulgaria, Croatia, Cyprus, Luxembourg, the Netherlands, Slovakia, and the Czech Republic.
The EPPO disclosed that the Naples-based Camorra mafia and the Sicilian Cosa Nostra were funneling their illicit proceeds into carousel fraud schemes involving VAT.
European Chief Prosecutor Laura Kövesi remarked, “Moby Dick is a significant investigation for the EPPO. We have long been warning about the dangerous involvement of organized crime groups in defrauding the EU budget.”
‘Colossal Damages’
“Aside from the enormous damages they cause, we have been cautioning about the threat to our internal security posed by their activities in this realm. We are now shedding light on a major case,” she added.
“‘Moby Dick’ showcases that there are not two separate criminal realms. There is the world of violent criminals engaged in drug smuggling and human trafficking, and then there is the world of white-collar criminals engaged in corruption and money laundering.”
The EPPO reported that assets totaling 520 million euro ($549 million) were being frozen to compensate for the harm caused to EU and national budgets.
In Italy alone, 129 bank accounts were frozen, along with 192 real estate properties, 44 luxury vehicles and boats seized, and real estate complexes confiscated in Sicily, Liguria, Lake Como, and Milan by the financial police.
Out of the arrested individuals, 34 were detained, nine were placed under house arrest, and four were prohibited from working but remained free.
The arrests took place in Italy, Spain, Bulgaria, the Czech Republic, and the Netherlands.
Most European countries have VAT applied to most goods sold or imported.
Carousel fraud is a type of VAT fraud where a network of companies circulate goods among each other without paying taxes in order to deceive tax authorities.
‘Unprecedented’ Level Of Complexity
The EPPO noted, “The level of complexity and efficiency demonstrated by this criminal syndicate engaged in VAT carousel fraud is unparalleled.” Between 2020 and 2023, they issued invoices totaling over €1.3 billion ($1.37 billion) for the sale of electronic goods like airpods and laptops.
The EPPO collaborated with Europol, as well as the Italian State Police and Financial Police from Milan, Palermo, and Varese.
Europol provided analytical support, cross-referenced data to identify connections, located 45 individuals using travel intelligence, and established a virtual command post to coordinate search operations.
The EPPO mentioned that the specific Camorra clans from Naples and Cosa Nostra groups from Sicily involved were not identified.
Additionally, the term Cosa Nostra refers to Sicilian mafia groups with ties to Italian American mafia families in the United States.
Reuters contributed to this report.
