Two suspects were arrested and 20 properties searched in Germany and Belgium on 16 September in an investigation into alleged VAT fraud worth more than €60 million. EPPO’s Cologne office is leading the case, known as Money Cat, which concerns a suspected trading network operating between Germany, France and Belgium.
The inquiry currently covers nine suspects believed to have participated in a criminal organisation. Its trade involved a range of goods, including protective masks and packaging materials. The searches took place at private homes and business premises in North Rhine-Westphalia and Belgium. The two arrests do not mean that all nine people under investigation were taken into custody.
Investigators seized cash, luxury watches, handbags, vehicles and a loaded firearm. EPPO referred to approximately €300,000 in value in its account of the seized items and said frozen bank accounts were still being evaluated. The statement did not give a final total for the assets secured, and the amount seized should not be equated with the estimated tax damage.
The alleged scheme involved missing traders and shell companies. In VAT fraud cases, a missing trader can be a business that incurs a tax liability but fails to account for it, leaving other companies in the chain to claim deductions or refunds. EPPO suspects that company networks were used here to exploit the tax treatment of qualifying cross-border trade within the EU.
One main suspect based in Germany allegedly declared VAT-exempt supplies to numerous companies in France and Belgium. Prosecutors believe those businesses acted as missing traders. At the same time, the German suspect is alleged to have deducted input tax on invoices from companies that had not actually supplied the goods or services shown on the documents.
Investigators suspect that more than €11 million in fictitious invoices were issued. This is a measure of the invoices under examination, not the full estimate of lost tax. EPPO places the suspected tax damage above €60 million and says the exact amount is still being calculated. The statement does not publish a transaction-by-transaction reconciliation of those figures.
The allegations involve both sides of a business’s tax position. A company may report sales that attract particular VAT treatment while also claiming credit for tax on its purchases. If the underlying transactions are false or the companies in the chain fail to pay the tax due, the paperwork can conceal a loss to public revenue. The prosecution’s account is that those mechanisms were used together in Money Cat.
Financial investigators also traced transfers through international banking channels. According to EPPO, substantial amounts were moved between accounts before being converted into cash and redistributed within the suspected network. Accounts in China and Türkiye were among those identified. The announcement does not establish the role of every account holder or say that every transfer to those countries was unlawful.
The shift from bank transfers to cash is relevant to following the proceeds. Banking records can show where funds were sent, while a cash withdrawal creates a separate question about who received or controlled the money afterwards. EPPO says its investigation identified both stages. It has not released the underlying records, and the full route of the alleged proceeds remains a matter for the criminal inquiry.
German support came from North Rhine-Westphalia’s financial crime office and police in Aachen and Düsseldorf. Belgian partners included an investigating judge, financial and economic crime investigators, computer crime specialists, an anti-corruption unit and dog teams trained to locate cash. Prosecutors in Duisburg provided administrative and legal assistance with asset recovery.
The involvement of a Belgian anti-corruption unit does not establish a bribery charge in this case. EPPO’s announcement describes suspected VAT fraud and participation in a criminal organisation. It does not identify a public official accused of receiving an improper payment. The nature of the alleged offences should be determined from the prosecution’s account rather than inferred from the name of a supporting police unit.
The searches and arrests are intended to advance the investigation and secure evidence and assets. They leave open the final amount of tax lost, the responsibility of each suspect and the amount that may eventually be recovered. The €60 million estimate remains provisional. No convictions were announced, and the seizure of property is not a finding of guilt. All people concerned are presumed innocent unless their responsibility is established before the competent courts.
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