The European Public Prosecutor’s Office (EPPO) says a suspected criminal organization sold more than one million used mobile phones as new to customers across the European Union. The investigation, known as Operation Troja, estimates the alleged harm to EU consumers at no less than €300 million, alongside more than €30 million in VAT losses for several member states.
- More than 160 searches and seizure actions were carried out in 19 countries.
- About 1,770 police officers, tax inspectors and customs agents took part in the operation.
- Seven suspects were arrested in Austria, Germany and Spain, including the two alleged leaders of the organization, according to EPPO.
Investigators allege that the phones were assembled from used components in Hong Kong and the United Arab Emirates, then cleaned, repackaged and marketed as new devices. The products were reportedly shipped first to the Netherlands, moved to warehouses in Germany and sold through online marketplaces to buyers throughout the EU.
The case also centers on alleged VAT fraud. EPPO says shell companies registered in Austria, Bulgaria, Germany, the Netherlands and Switzerland may have improperly used the VAT margin scheme for resale goods since 2018.
That scheme taxes only a reseller’s profit margin when VAT has already been paid on the goods. Because the phones in the alleged operation were presented as new, investigators contend that VAT should instead have been charged on their full sale price.
