German customs authorities are investigating 50 suspects in Hesse over allegations that they withheld more than €60 million in taxes from the authorities through money laundering and tax evasion. According to the Frankfurt am Main Main Customs Office, which announced the investigation on Wednesday, the suspects are alleged to have laundered cash and evaded taxes and social security contributions through a network of shell companies. The group is believed to have operated as a service provider since 2017.
Foreign companies from non-EU countries are alleged to have generated cash through the sale of illegal goods. To introduce this money into the legal payment system, members of the group allegedly provided shell companies through which the cash was transferred to foreign accounts as supposedly legitimate transactions. In return for these services, the group members are alleged to have received a commission.
The cash was also allegedly used to pay workers in the logistics sector off the books. Sham invoices were reportedly used for this purpose as well, allowing the suspects to claim unjustified input tax deductions. According to investigators, they have traced payment flows amounting to around €150 million.
To make detection more difficult, the group members allegedly founded new shell companies on a regular basis and liquidated the old ones. The companies were reportedly headed by nominee managing directors, who formally acted as company executives on behalf of others.
Around 800 officers searched numerous residential and business premises in Hesse, North Rhine-Westphalia and Belgium on Wednesday. Within the area covered by the Frankfurt am Main Main Customs Office alone, authorities searched 22 companies, 60 residential properties, and nine banks and tax consultancy offices. In North Rhine-Westphalia, ten residential properties and ten companies were searched. Four people were arrested.
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