A major investigation by the European Public Prosecutor’s Office (EPPO), dubbed ‘Kingdom,’ has resulted in the arrest of seven suspects in the Netherlands in connection with a €13 million VAT fraud scheme.
The investigation began when a Belgian subsidiary of a Dutch company requested a VAT refund from the Belgian Treasury, totaling €13.7 million. This amount was disbursed to various bank accounts linked to the suspects. However, one bank raised suspicions and returned €3.7 million to the Treasury.
Authorities discovered that the claim was fraudulent, as no actual goods were traded; only fake invoices and false VAT declarations were submitted to the Belgian tax authorities. The Dutch company involved was already known as a “missing trader” in the Netherlands—an entity set up solely to exploit tax refund systems, leveraging EU regulations on VAT exemptions for cross-border transactions. Many suspects had previous offenses on record and attempted to evade detection by expanding their operations into Belgium.
After the initial fraudulent refund, the suspects attempted to replicate the scheme with another Dutch company’s Belgian branch, claiming a refund of over €4 million. However, this claim was not processed due to emerging suspicions.
Investigators have traced a significant portion of the illicit gains to the United Arab Emirates, while others were used for purchasing luxury cars, high-end goods, and gambling in casinos.
On May 23, 2024, law enforcement conducted extensive searches at various companies in the Netherlands linked to the suspects and at their residences. The operation involved 97 officers from the Dutch Fiscal Information and Investigation Service (FIOD), the Dutch Public Prosecutor’s Office, and the Belgian Federal Police’s Central Unit for Economic Crime.
During the searches, authorities seized luxury items valued over €200,000, €7,000 in cash, and a vehicle. In an earlier investigation into money laundering involving some of the suspects, the FIOD had already confiscated two Porsches and one Lamborghini, along with bank accounts totaling €671,000, believed to have been purchased with funds from the fraudulent VAT refund.
All individuals are presumed innocent until proven guilty in a competent Belgian court.
The EPPO serves as the independent public prosecution office for the European Union, tasked with investigating and prosecuting crimes against the EU’s financial interests.
