An international law enforcement operation led by the European Public Prosecutor’s Office (EPPO) resulted in the arrests of seven people, including two alleged ringleaders, to dismantle a criminal network suspected of selling more than one million used mobile phones as new, the EPPO announced Tuesday. The cross-border crackdown, code-named "Troja," involved more than 1,700 officers conducting over 160 searches across 19 countries. Authorities estimate the scheme defrauded European Union consumers of at least 300 million euros ($340 million) and caused 30 million euros ($34 million) in value-added tax (VAT) losses.
According to prosecutors, the syndicate assembled phones from used components in Hong Kong and the United Arab Emirates. The devices were then shipped through the Netherlands to warehouses in Germany, where they were cleaned, packaged, and sold on online marketplaces to unsuspecting customers across the EU as brand-new products.
To maximize illicit profits, the group allegedly used shell companies in Austria, Bulgaria, Germany, the Netherlands, and Switzerland to fraudulently exploit a "margin taxation" scheme since 2018. By classifying the devices as resold goods for tax purposes while charging buyers full new-item prices, the network evaded paying the full VAT due, generating widespread tax deficits across multiple member states.
