Judicial authorities are moving to freeze bank accounts, property and all other assets belonging to individuals and companies implicated in one of the largest VAT fraud cases, following a new ruling by the Athens Council of Misdemeanour Judges.

The case concerns an intricate network of businesses which, according to evidence gathered during the judicial investigation, allegedly caused losses exceeding €40.7 million by exploiting imports of goods from China and the European system for the movement of products.

Ruling No. 4293/2026, forwarded by the Athens Public Prosecutor’s Office for immediate implementation on 4 November 2026, sheds new light on the case and outlines a mechanism through which goods arriving at the Port of Piraeus were recorded as traveling from Greece to Bulgaria and, from there, to businesses in Italy and Spain.

However, the judicial investigation found that several of the businesses listed as the final purchasers had stated that they had never ordered or received the products in question.

Behind this supply route, which on paper appeared to represent ordinary commercial activity, law enforcement authorities identified indications of organised fraud involving fictitious transactions, unlawful VAT refunds, undervalued goods and individuals listed as the owners or directors of dozens of companies, despite declaring very low or even zero incomes.

The scheme involving goods imported from China

To understand how the alleged criminal network operated, it is enough to follow the journey of a consignment of goods from China to Europe.

According to the ruling, Greek businesses imported products from China, which arrived in Greece through the country’s customs authorities. Instead of following the standard commercial process, however, those involved allegedly used a system of fictitious transactions to avoid paying VAT or even to claim and receive tax refunds to which they were not entitled.

According to the judicial authorities, Greek and Bulgarian companies were involved in the scheme. The latter appeared as intermediary purchasers of the goods, which they subsequently purportedly resold to businesses in other European countries, primarily Italy and Spain.

The alleged network is said to have exploited two different import procedures, known to customs authorities as ‘Customs Procedure 40’ and ‘Customs Procedure 42’.

Under the first procedure, businesses paid VAT when the products arrived in Greece. They subsequently allegedly presented fictitious sales to other European countries in order to claim and receive VAT refunds.

Under the second procedure, goods were imported into Greece without VAT being paid at customs, on the grounds that they were destined for another European Union member state, where they would be subject to taxation. In reality, however, according to the investigation’s findings, many of these transactions never took place in the manner recorded in the official documents.

One of the most revealing elements of the ruling concerns the businesses listed as the final recipients of the products.

When the Greek authorities sought assistance from their counterparts in Italy and Spain, it emerged that companies identified as purchasers in the commercial documents claimed to know nothing about the transactions in question. In other words, according to the paperwork, these businesses had purchased goods from Greek and Bulgarian companies. When questioned, however, they said they had neither ordered nor received them.

This finding strengthened the suspicions of the competent authorities that the declared purchases and sales were fictitious and that the products were ultimately channelled into the black market without the payment of the taxes due.

The judicial document also notes that a parallel investigation, codenamed ‘FETA’, is under way in Spain. It concerns an organised VAT fraud network operating through commercial transactions within the European Union.

The €40.7 million in losses

The figures recorded in the ruling illustrate the scale of the alleged fraud under investigation.

According to the case file, the businesses involved managed to claim and receive VAT refunds totalling €8,703,622 by presenting goods imported from China as products that had subsequently been sold to other European countries.

At the same time, through Customs Procedure 42, they allegedly evaded the payment of at least €40,006,214.04 in VAT. The judicial document puts the total loss in VAT revenue resulting from the network’s activities at more than €40,709,836.

According to the case file, the actual financial damage could be even greater, as the investigation remains ongoing.

This is because, in addition to the VAT fraud, investigators identified indications that the goods were being imported into Greece at declared values far below their actual worth.

In this way, the businesses allegedly paid lower customs duties, while in certain cases the products were declared under incorrect categories in order to attract even lower rates of taxation.

The taxi driver listed as a ‘front man’

The evidence concerning the individuals presented as directors or owners of the businesses involved is also of particular interest.

The ruling describes cases involving people who declared very low or even zero incomes while, at the same time, appearing as participants in dozens of companies, many of which operated in entirely different business sectors.

One particularly notable case concerns an individual who ran a sole proprietorship operating a taxi service but also appeared as a director or partner in numerous businesses in the catering, entertainment and services sectors.

The list of companies linked to the individual includes businesses operating in Mykonos, Athens and other parts of the country.

Raids at 20 locations and an international investigation

The case has taken on an international dimension, as the investigation extends beyond Greece.

According to the ruling, at least 15 requests for cross-border investigative assistance have been sent to European countries, including Italy, Spain, France, Slovakia, Poland, Portugal and Germany.

On 25 June 2025, following an order from the European Public Prosecutor’s Office (EPPO), a coordinated police operation was carried out at 20 separate locations across the Attica region.

Searches were conducted, among other places, at the premises of companies linked to the case, as well as at the Third Piraeus Import Customs Office in Neo Ikonio.

The aim was to locate documents, commercial records, electronic files and other evidence that could reveal the actual route taken by the goods, as well as any potentially unlawful arrangements with customs officials. During the operation, a large number of digital items of evidential value were seized and are still being examined.

The European Public Prosecutor’s Office investigation is continuing, as judicial authorities seek to establish the role of each individual involved and determine the full extent of the unlawful transactions.

Why are the assets being frozen now?

The initial freezing of assets was ordered on 8 May 2025 by the European Delegated Prosecutor. However, as the preliminary investigation has not yet been completed and the previous measures were approaching their expiry date, it was deemed necessary to decide whether they should remain in force.

Accordingly, under the new ruling No. 4293/2026, forwarded by the Athens Public Prosecutor’s Office on 4 November, the freeze on bank accounts, real estate, securities, investment products and assets held even in bank safety deposit boxes is ordered to remain in place.