The European Public Prosecutor's Office (EPPO) announced on Tuesday that it had uncovered a criminal network responsible for selling over a million used mobile phones across Europe. The network, which operated in 19 European countries, resulted in losses of approximately €300 million for consumers. The operation, dubbed "Troja," involved 1770 police officers, tax officials, and customs officers executing over 160 searches.
According to the EPPO, the network sourced used phone components from Hong Kong and the United Arab Emirates, refurbished them, and repackaged them in the Netherlands. The phones were then transported to warehouses in Germany and sold through e-commerce platforms across the European Union. The network allegedly used shell companies in Austria, Bulgaria, Germany, the Netherlands, and Switzerland to exploit the VAT system for used goods.
The EPPO claims that the network sold refurbished phones as new, evading taxes on the full sale price instead of just the profit margin. This scheme led to a VAT revenue shortfall of over €30 million in several EU countries, including at least €25 million in Germany. Authorities seized an estimated 10,000 to 15,000 devices from a warehouse in Krefeld, western Germany.
The operation resulted in the arrest of seven individuals, including alleged leaders of the network. The EPPO is also investigating potential links to smuggling, trademark infringement, and participation in a criminal organization. The crackdown follows a previous report by the European Anti-Fraud Office (OLAF).
The network's activities not only caused significant financial losses but also posed a risk to consumer safety. Refurbished phones sold as new may not meet safety and quality standards, potentially putting users at risk. The EPPO's operation highlights the importance of cooperation between European authorities to combat cross-border crime.
The European Union has been working to strengthen its regulatory framework to prevent similar schemes. The EPPO's efforts demonstrate the commitment to protecting consumers and enforcing tax laws. The operation's success is a significant step in the fight against organized crime in the EU.
The investigation is ongoing, with authorities working to identify and prosecute all individuals involved in the network. The EPPO's work will help to ensure that those responsible are held accountable and that consumers are protected from similar scams in the future.
Key points
- The network sold refurbished phones as new, evading taxes on the full sale price instead of just the profit margin.
- The scheme led to a VAT revenue shortfall of over €30 million in several EU countries.
- Authorities seized an estimated 10,000 to 15,000 devices from a warehouse in Krefeld, western Germany.
