(Luxembourg, 14 April 2025) – The European Public Prosecutor’s Office (EPPO) in Munich (Germany) has secured another conviction in an investigation into a large-scale VAT fraud involving the sales of Voice over IP (VoIP), with an estimated damage of €100 million. This is the third conviction in this investigation into a criminal network dedicated to fraudulent trading of VoIP, code-named Cuba.
On 8 April 2025, the Landshut Regional Court (Landgericht Landshut) convicted one member of the criminal organisation with organised VAT fraud, after he claimed VAT refunds from the tax authorities based on fraudulent invoices, using a VAT carousel fraud.
VAT carousel fraud takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value added tax (VAT). It is understood that the defendant was part of a network that organised a fraudulent chain of missing traders, which would vanish without fulfilling their tax obligations. Other companies in the fraudulent chain would subsequently claim VAT reimbursements from the national tax authorities. Some of the forged invoices used by the criminal organisation referred Cuba as the destination of the VoIP services, which were entirely fictitious.
The court considered that the actions of the convicted individual resulted in an estimated damage of around €7.3 million in unpaid VAT. The fraudulent scheme is presumably much bigger, with an estimated damage of €100 million.
The court sentenced the defendant to two years’ imprisonment (on probation) and confiscated €7.3 million. Previously, two more individuals had been sentenced to 5 years and 9 months’ imprisonment and two years on probation.
The investigation leading to this conviction counted on the support of the Tax Investigation Office in Leipzig (Steuerfahndung Leipzig).
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.