EPPO raids across 19 countries dismantle 300 million euro refurbished phone fraud ring

Cross-border raids and arrests

The European Public Prosecutor's Office (EPPO), headed by European Chief Prosecutor Laura Codruța Kövesi, coordinated an international law enforcement operation code-named Operation Troja. More than 1,770 police officers, customs officials, and tax inspectors executed over 160 searches across 19 countries, including Germany, the Netherlands, Austria, Belgium, Spain, Poland, Italy, Romania, Luxembourg, and Switzerland. Authorities in the United Kingdom also questioned one witness in connection with the inquiry. Seven suspects were arrested across three countries on Saturday, comprising four individuals in Germany, two in Austria, and one in Spain. Among those detained were the two suspected leaders of the syndicate, identified as 43-year-old Ukrainian citizen Oleksiy S. and Moldovan citizen Eugen R., both of whom have prior fraud convictions. Special customs units arrested Oleksiy S. in Düsseldorf.

Germany4

Austria2

Spain1

Germany

4 arrests

Austria

2 arrests

Spain

1 arrests

Data from the article text

The refurbishment and distribution supply chain

Investigators established that the criminal network assembled smartphones from cleaned used components in Hong Kong and the United Arab Emirates, specifically Dubai. The devices, which included products from leading manufacturers such as Samsung, were repackaged and sealed to look factory-new before being shipped to the Netherlands. From Dutch transit hubs, the phones were transported to German warehouses, including an industrial storage facility in Krefeld where investigators located an estimated 10,000 to 15,000 handsets. The organization distributed more than one million assembled phones across the European Union using prominent online marketplaces such as Amazon. Consumers across the EU suffered an estimated total loss of at least 300 million euros, representing the difference between the full new-device price paid and the actual market value of used hardware, with buyers in Germany purchasing the vast majority.

Tax evasion and shell company network

In addition to consumer fraud, the syndicate ran a Value Added Tax evasion scheme active since at least 2018. The suspects used a web of shell companies registered in Austria, Bulgaria, Germany, the Netherlands, and Switzerland to illegally exploit margin taxation rules. Under European Union tax law, margin taxation applies strictly to resold secondhand merchandise on which VAT has already been paid, allowing dealers to pay tax only on their profit margin. Because the organization marketed and sold the assembled devices as brand-new products, VAT was legally due on the full purchase price. By manipulating this tax regime, the group inflated its profits and deprived European state budgets of more than 30 million euros in unpaid VAT, with German tax authorities suffering a loss of at least 25 million euros.

Investigation background and evidence recovery

The international probe began following a referral from the European Anti-Fraud Office (OLAF). In Germany, the investigation was handled by the Essen Customs Investigation Office, the North Rhine-Westphalia State Office for Combating Financial Crime, and the Düsseldorf Police Headquarters. International operational partners included the Dutch Fiscal Information and Investigation Service (FIOD) and the Belgian Federal Police. Law enforcement personnel seized additional documentation, electronic hardware, and financial assets during the coordinated Tuesday raids. The EPPO and German investigators confirmed that the network generated at least 300 million euros in total sales revenue from the operation, while cross-border legal proceedings continue.