The criminal network “Operation Admiral” earned more than 80 million euros in six years thanks to VAT evasion

The criminal network involved in the first indictment in Portugal brought by European prosecutors earned €80 million over six years from a VAT fraud that spanned several countries and led to charges against 12 people and 15 companies.

According to the Operation Admiral indictment, which Lusa had access to, the 12 defendants are charged with a total of 53 crimes, including criminal enterprise, qualified tax fraud, private sector corruption, money laundering and forgery. The companies are responsible for a total of 29 offences, namely gang crime, tax fraud and money laundering.

The European Prosecutor’s Office (EPPO) describes in more than 900 pages an economic and financial scheme created in 2016 by French citizen Pratikun Lavivong and Portuguese Filipe Fernandez, in which the former managed the entire international structure and controlled transactions, and the latter built the operational structure in Portugal.

“They strategically sold a number of companies that they had allocated to the network, managing to extract from them every possible criminal advantage,” the document says, adding: “In total, the association managed to avoid paying a global sum of 80 euros.” 076,336.57 debt as VAT to the National Treasury in relation to net sales, which (…) amounted to 420,568,581.18 euros.”

The duo then tasked Max Cardoso, an associate of presenter Ana Lucia Matos (accused of money laundering but not integrated into the criminal community by the prosecution), to ensure that the lower levels of the network carried out the “necessary actions” for the scheme. , uniting the team with “frontmen” trained by Sandra Garcia.

To these were added companies of the first, second and third levels, pursuing different goals in their activities and preparing supporting documentation to deceive the authorities. Bank manager Nuno Cancela also played a “significant role” in facilitating the creation and transfer of bank accounts controlled by the defendants, circumventing anti-money laundering regulations.

The scheme was based on the purchase of IT goods by Portuguese companies from foreign suppliers, which were delivered directly to logistics centers in France, bypassing Portugal. These devices were then essentially sold on the Amazon Marketplace platform, where the user who purchased the product made a corresponding payment to Amazon, which then transferred the money (with a discount on fees) to a bank account linked to the seller’s account.

In an effort to take advantage of community VAT exemption rules in cross-border transactions between European Union (EU) member states, companies set up in Portugal by the network bill as if Amazon (based in Luxembourg) or MediaMarkt were the true end customers, benefiting. from fulfilling the three aspects necessary for exemption from VAT in the country.

“The goods purchased from suppliers were presumably destined for a business customer located in the Member State of arrival of the goods and were not intended to be received in Portugal; the intended buyer of the goods, Amazon/Mediamarkt, was registered there for value added tax purposes; and the invoices falsely stated that Amazon/Mediamarkt were responsible for paying the tax,” explains the EPPO.

In addition to this activity, which spread across Portugal, France, Dubai, Cyprus and the United States, the alleged criminal network also expanded into real estate and luxury goods such as watches, jewelry and cars.

Defendants Pratikun Lawivong, Filipe Fernandez, Sandra Garcia and Max Cardoso (who were already sentenced in France in 2021 for fraud and money laundering to three years’ probation and disqualification from managing or controlling any companies) are in pre-trial detention. detention, and Isabelle Lafontaine is under house arrest.

The prosecution understands that the risk of flight, further criminal activity and disruption of the trial remains. It was also decided to obtain certificates against several accused for further investigation.

Operation Admiral was launched in November 2022 with investigations in more than a dozen European countries, identifying links to more than 9 thousand other companies and 600 people.

The European Public Prosecutor’s Office is an independent body with powers to investigate, prosecute and bring charges, and to support them in the investigation and prosecution of criminal offenses affecting EU financial interests (e.g. fraud, corruption or cross-border fraud, VAT exceeding €10 million ).