Five arrests, including three in Cyprus, were made as part of an investigation by the European Public Prosecutor's Office (EPPO) into cross-border VAT fraud amounting to €114 million. euros, with a focus on the sale of smartphones and tax losses in Sweden and Germany.
The arrests took place this week in Cyprus, Germany and Italy, at the request of the European Public Prosecutor's Office in Munich. At the same time, searches and seizures were carried out in Cyprus, Greece and Italy.
According to the EPPO, the criminal organization under investigation allegedly used a complex system of cyclical VAT fraud, taking advantage of EU rules on cross-border transactions between member states, which are exempt from VAT under certain conditions. The smartphones were sold through ghost companies based in Germany, Albania and Sweden. The estimated tax loss amounts to €80 million. euros to Sweden and 34 million. euros in Germany. The detainees allegedly set up and controlled the fraud network.
As part of the operation, a total of 12 searches were carried out in the homes and business premises of suspects and companies that are being investigated. Assets worth up to €80,000 were also seized, while bank accounts, cars and real estate in Cyprus, Greece and Italy were seized.
The operation involved, among others, the competent tax and police authorities of Cyprus, as well as the Financial Intelligence Unit (MOKAS), together with the respective authorities of Germany, Greece and Italy. The investigation is part of the European Public Prosecutor's Office's broader "Midas" investigation framework for cases of cross-border VAT fraud.
The Police announcement about the operation
The Cypriot authorities assisted in an international investigation operation under the direction of the European Public Prosecutor's Office, with the Cyprus Police participating on 13/10/2026, in the Joint Day of Action, during which coordinated operations were carried out in Germany, Greece, Italy and Cyprus.
The police operations were carried out as part of an investigation into a case of large-scale fraud related to the non-payment of VAT, amounting to 114 million euros, from mobile phone sales.
According to the data under investigation, the perpetrators of the fraud developed a cross-border trade network, with involved companies based in European countries, in order to achieve the illegal avoidance of VAT from the sales of mobile phones in countries such as Germany and Sweden.
Investigations by the police authorities led to the arrest of five persons, with the three persons having been arrested by the authorities and the Cyprus Police. As part of the investigation of the case, statements are taken from various persons.
On behalf of the Police, the Crime Fighting Department, Police Headquarters, with members of the Office for the Execution of European Orders and Requests for Judicial Assistance and members of the Cybercrime Sub-Directorate, as well as members of the Nicosia and Larnaca Police Department, participated in the investigations.
The investigations in our country were carried out under the supervision of the European Envoy of the European Public Prosecutor's Office in Cyprus, with the participation of the Cyprus Police, the Tax Department, the Unit for Combating Cover-up Offences – MOKAS, as well as prosecutors and investigators from Germany, who arrived in Cyprus to assist in the joint day of action.
