Operation Hermes: 39 arrested in major operation against €150M VAT fraud
The Judicial Police arrested 39 suspects accused of defrauding the State by more than 150 million euros in a tax fraud scheme known as the "VAT carousel".
Major operation dismantles transnational VAT fraud network in Portugal and seven other countries
The Judicial Police arrested 39 suspects on Wednesday for tax fraud, criminal association and money laundering, in a scheme that defrauded the Portuguese State by more than 150 million euros. The operation, first reported by CNN Portugal, was named "Hermes" and stems from an investigation conducted by the European Public Prosecutor's Office (EPPO) together with the Tax Administration and the National Republican Guard.
The "VAT carousel" scheme
The criminal activity is based on a fiscal fraud mechanism known as a "carousel", which exploits weaknesses in the VAT taxation regime for intra-community transactions of goods. In practice, the scheme involved the commercialisation of mobile phones and electronic devices, circulating the merchandise through a fraudulent chain of companies and missing traders — entities that disappear without fulfilling their tax obligations. The remaining companies in the chain would then request VAT reimbursement from the national tax authorities.
The investigation developed across two separate inquiries but focusing on the same criminal activity. In Portugal, the estimated financial advantage amounted to at least 125 million euros in one investigation and 30 million in the other.
248 searches in 30 Portuguese municipalities
The operation involved 248 residential and non-residential searches in 30 municipalities, including Porto, Braga, Lisbon, Sintra, Cascais, Almada, Setúbal and Loulé. The 39 arrested — Portuguese and foreign nationals, aged between 30 and 60 — are linked to the transnational organisation and will be presented to the Central Criminal Court of Instruction for initial interrogation and application of coercive measures.
During the operation, the Asset Recovery Office proceeded to the judicial seizure of 26 properties, shareholdings in 18 companies, 80 motor vehicles, other luxury goods and various bank accounts in Portugal. Four high-displacement vehicles were also seized and large amounts of cash in euros and foreign currency.
European dimension: more than 300 searches and 62 arrested in total
The operation extended to seven other countries: Germany, France, Spain, Italy, Malta, the Netherlands, Lithuania and Austria. In total, more than 300 searches were carried out throughout Europe. The 39 arrested in Portugal are in addition to 20 in Spain and three in Italy, totalling 62 suspected arrested.
The authorities executed seizure warrants for assets and funds valued at up to 310 million euros. Bank accounts and shareholdings were frozen, and real estate, luxury vehicles, cash and gold coins valued at up to nine million euros were seized.
More than a thousand personnel mobilised
The police operation mobilised approximately 740 officers from various departments of the Judicial Police, 212 officers from the Tax Administration and 151 military personnel from the GNR. Also participating were 13 judicial magistrates and seven Portuguese Delegated European Prosecutors, with the collaboration of Europol.
Source: CNN Portugal