Investigation Midas. Credit score: X @EUProsecutor
A fourth conviction has been made within the €195 million VAT fraud scheme that spans 17 international locations and is usually referred to as the Midas investigation.
Allegedly, Covid face masks have been offered to Germany’s personal well being ministry utilizing a pretend Hong Kong agency. On July 15, 2025, a person was sentenced to a suspended 18 months in jail by a German court docket for his function in one of many EU’s largest cross-border tax scams to this point.
Large VAT rip-off exploited EU tax loopholes
The so-called Midas case, led by the European Public Prosecutor’s Workplace (EPPO), centres on VAT carousel fraud, the place items transfer throughout EU borders tax-free earlier than vanishing from the books.
In accordance with EPPO, the convicted man acted because the director of a lacking dealer firm that helped steal round €1 million in VAT.
The investigation uncovered a community of shell firms, pretend identities, and fictitious invoices allegedly used to promote smartphones, electronics, and private protecting tools (PPE) through the pandemic.
Covid face masks from pretend China agency
One of the crucial brazen components of the scheme concerned protecting face masks purchased by the German Federal Ministry of Well being in 2020. EPPO revealed that the ministry unknowingly bought the masks from an organization pretending to be based mostly in Hong Kong. Actually, the products by no means left Germany.
The corporate firstly of the provision chain, together with the pretend Hong Kong entrance, did not reimburse VAT after the sale, leading to a direct lack of taxpayer cash.
The complete scale of the fraud grew to become public in February 2024, when over 180 searches have been carried out throughout 17 international locations, resulting in:
- 14 arrests
- Over €15 million price of smartphones seized
- A €3 million yacht, luxurious watches, €1.2 million in money and crypto
- A number of high-end vehicles together with a Rolls-Royce, BMW, and Vary Rover
- 2.5 kg of gold and designer jewelry
The suspects allegedly used encrypted communication, buffer firms, and straw males to protect the operation.
The EU-wide investigation was made attainable via EPPO’s powers to coordinate quick, transnational motion. It obtained help from:
- Europol
- Eurojust
- Germany: Tax Investigation Places of work (Berlin, Bielefeld, Cottbus, Münster, Nuremberg), Police HQs (Nordhessen, Brandenburg), State Prison Police (Berlin and Brandenburg)
- UK: Her Majesty’s Income & Customs (HMRC)
- Italy: Guardia di Finanza (GdF)
- Austria: Amt für Betrugsbekämpfung (ABB)
- Cyprus: Police Cyprus Division
- Czechia: Nationwide Organised Crime Company (NCOZ)
- Estonia: Estonian Tax and Customs Board (EMTA)
- Malta: Monetary Crime Investigation Division (FCID)
- Netherlands: Fiscal Info and Investigation Service (FIOD)
- Poland: Warsaw Police Division for Financial Crimes
- Portugal: Guardia Nacional Republicana (GNR)
- Sweden: Swedish Financial Crime Authority (SECA)
- Slovakia: Národná Kriminálna Agentúra (PPZ)
- Albania: Particular Prosecution Workplace towards Corruption and Organised Crime (SPAC)
- Slovenia, Hungary, and Croatia additionally participated in operations
Regardless of the large scale of the fraud and confirmed involvement of a nationwide well being ministry, there have been no reported investigations into authorities oversight or regulatory failures.
With solely 4 convictions to this point, severe questions on who else is on the market unscathed stay.
View all European information.