The raids, carried out in Berlin, Magdeburg, Hamburg and Hanover, targeted a criminal organisation accused of distributing chemically modified fuels designed to evade both VAT and excise duties.
Investigators estimate the group’s activities caused losses of €66 million in unpaid VAT and over €137 million in excise duties since 2023.
At the core of the investigation, code-named “Water into Wine”, is a scheme involving so-called designer fuels, substances altered to resemble lubricants in order to avoid taxation. Once inside Germany, the products were allegedly relabelled and sold as diesel, which is subject to significantly higher taxes.
“The products were falsely declared as lubricating oil and then re-declared as diesel to bypass energy taxes,” the EPPO said in a statement. “This tactic breaks the traceability of the supply chain and conceals the true nature and origin of the products.”
The fuel was reportedly routed into Germany via Poland, but its true origin remains unknown. A complex network of triangular transactions was used to hide the source and nature of the fuels. Several companies in Lithuania, Latvia and Hungary were allegedly involved in the chain, creating the illusion of legitimate trade.
The organisation is also suspected of using missing traders, companies set up to issue false invoices without paying tax, to claim fraudulent VAT refunds. This created the appearance that taxes had been paid when, in fact, neither VAT nor energy duties were ever remitted.
Assets seized during the operation include two safes, cryptocurrency wallets, server rooms, Rolex watches, and live firearms with ammunition. Investigators believe some of the criminal proceeds were laundered through investments in precious metals or transferred to foreign accounts via payment service providers.
The criminal group is believed to have operated across at least seven EU countries; Germany, Belgium, Hungary, Latvia, Lithuania, Poland and Slovakia, and targeted both public finances and end consumers.
The EPPO, headquartered in Luxembourg, led the investigation through its Berlin office, with support from tax and customs officers in Hamburg, Hanover, Berlin and Magdeburg. Coordination was provided by Europol, which maintained a Virtual Command Post to support cross-border communication.
