International action on a billion-dollar criminal organization

An extensive Transdanubian criminal organization specializing in carousel fraud has recently been liquidated by the National Tax and Customs Office (NAV). More than 150 detectives and patrols took part in the action, supported by foreign counterparts as well as Eurojust and Europol. The criminal gang reclaimed more than HUF 3 billion of VAT unauthorized through the established invoicing chains.

It is suspected that the criminal organization operated three billing chains, through which perfume and food supplements were “traveled” between Hungary and Slovakia, and between Hungary and the Czech Republic. The products reached the profitable so-called brokerage companies through fictitious domestic sales of alternating failing companies, which sold them to companies established in the Community. However, in reality, the goods were never marketed as they arrived in the destination country, they were also transported back to Hungary with false documents to pass through the chain again and again. With this method, the companies were able to reclaim more than HUF 3 billion in VAT without anyone paying it into the budget before.

Research into the eradication of the criminal gang has also taken place in Hungary and Slovakia, and the management of cross-border measures has also been supported by Eurojust. NAV investigators and patrols searched more than 50 sites simultaneously and produced 20 suspects. Unauthorized machine guns were also found at the network manager, and a member of the criminal organization tried to hide from the authority, but was also captured and detained by investigators within hours.

Plenty of perfume, as well as improperly stored food supplements contaminated with animal feces and the means to repackage them, were found in the criminal organization’s warehouse. The National Food Chain Safety Office has also initiated proceedings in the matter to notify NAV.

Investigators seized large amounts of cash from members of the organization, as well as bank accounts, business shares, patents, vehicles and real estate, worth more than one billion forints. Using the online invoice data, we were able to suspend the payment of nearly eight hundred million forints of illegally reclaimed VAT in time, so that a significant part of the damage caused can be recovered.

NAV investigators detained 11 people. The Tatabánya District Court has ordered the arrest of 7 suspects. The investigation is of particular value due to budget fraud committed in a criminal organization. Leaders of the organization can be given up to 20 years if their guilt is proven.