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Sh11B International VAT Fraud Mastermind Arrested In Kenya

On 5 June 2024, the suspect was deported and taken into custody at the airport in Frankfurt by the Organized crime unit of the State Criminal Police Office of North Rhine-Westphalia, at the request of the EPPO, under a European Arrest Warrant.

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A suspected ringleader of an €85 million (Sh11 billion) VAT fraud has been arrested in Nairobi (Kenya), after hiding from the authorities, following an investigation by the European Public Prosecutor’s Office (EPPO) in Hamburg (Germany), code-named Goliath.

The suspect is a Danish citizen who had fled Denmark to escape arrest, prior to an action targeting an international criminal ring, carried out by the EPPO on 22 November 2023. At that time, another suspected ringleader of the fraudulent scheme was arrested. The whereabouts of the second suspect were unknown to authorities. 

After a six-month surveillance undertaking, the EPPO was able to locate and arrest the suspect in Nairobi, on 23 May 2024, with the support of the Danish authorities, Germany’s Federal Criminal Police Office (Bundeskriminalamt: BKA) and Germany’s State Criminal Police Office of North Rhine-Westphalia (Landeskriminalamt Nordrhein-Westfalen). 

On 5 June 2024, the suspect was deported and taken into custody at the airport in Frankfurt by the Organized crime unit of the State Criminal Police Office of North Rhine-Westphalia, at the request of the EPPO, under a European Arrest Warrant.

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The suspect was wanted in connection with a criminal organisation, active in the international trade of consumer electronics (mainly AirPods). They are suspected of evading tax by means of a VAT carousel fraud – a complex criminal scheme that takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value-added tax – with estimated losses to the EU and national budgets of at least €85 million.

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According to the investigation, the suspects established companies in Germany and other EU Member States, as well as in non-EU countries, in order to trade the goods through a fraudulent chain of missing traders – who would vanish without fulfilling their tax obligations. Other companies in the fraudulent chain would subsequently claim VAT reimbursements from the national tax authorities.

For the location and the arrest of the suspect, the EPPO counted on the support of Germany’s Federal Criminal Police Office (Bundeskriminalamt: BKA), the State Criminal Police Office of North Rhine-Westphalia (Landeskriminalamt Nordrhein-Westfalen), the German tax investigation unit of Nuremberg (Steuerfahndung Nürnberg), the Copenhagen Police in Denmark (Københavns Politi), the Operational Network (@ON – international police cooperation on mafia-style criminal groups) and the authorities in Kenya, in particular the Directorate of Criminal Investigation (DCI). 

The EPPO is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.

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