Joint press release of the European Public Prosecutor’s Office (EPPO) and the Customs Investigation Offices from Hamburg and Hanover (Zollfahndungsämter Hamburg und Hannover)
(Luxembourg, 25 June 2025) – The European Public Prosecutor’s Office (EPPO) in Berlin (Germany) has arrested two suspects, and seized evidence and assets today in an investigation against a criminal organisation suspected of defrauding €66 million in unpaid VAT and of evading over €137 million in excise duties.
Tax investigation officers from Berlin and Magdeburg, and customs investigation officers from Hamburg and Hanover carried out searches and judicial measures today in Germany. The seized assets include two safes, cryptocurrency, server rooms, Rolex watches, and live firearms with ammunition.
At the heart of the fraudulent scheme is a criminal organisation formed of individuals operating in Germany, Belgium, Hungary, Latvia, Lithuania, Poland and Slovakia. The group is believed to have distributed so-called designer fuels, which are chemically modified products designed to elude taxation, using a complex chain of triangular transactions via several companies, in this case in Lithuania, Latvia and Hungary.
According to the investigation, code-named ‘Water into Wine’, the origin of the designer fuels is unknown. They are entering the German market via Poland, falsely declared as lubricating oil. Once they reach Germany, the products are allegedly relabelled and re-declared as diesel, to bypass energy taxes. This tactic breaks the traceability of the supply chain and conceals the true nature and origin of the products.
Based on the evidence, the criminal organisation used multiple strategies to evade VAT and the payment of excise duties, including a network of missing traders who issued false invoices to distributors for the alleged delivery of diesel fuels in Germany. This enabled the group to fraudulently claim VAT refunds. This also created the false appearance that the diesel had been correctly taxed, deceiving both end customers and customs authorities.
The criminal organisation is also suspected of laundering their illicit profits by investing in precious metals or transferring them to foreign accounts via payment service providers.
It is estimated that the illicit activities of the criminal organisation caused a loss of €66 million in unpaid VAT and over €137 million in excise duties since 2023. Several of the suspected companies never paid neither VAT nor energy tax.
All persons concerned are presumed innocent until proven guilty in the competent German courts of law.
The European Public Prosecutor’s Office (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.