An alleged Lithuanian gang leader of a criminal organisation dedicated to importing scrapped cars involved in accidents in the US, which, after cosmetic repairs, were resold in Europe, including Portugal, was arrested in Madeira, the European Public Prosecutor’s Office said today.
A source from the European Public Prosecutor’s Office (EPPO) told the Lusa agency that the arrest in Madeira of the Lithuanian citizen, who has defrauded the United States of hundreds of millions of euros in customs duties and taxes (VAT) was carried out by the GNR, through the Tax Action Unit, and 18 European prosecutors.
According to the statement, the investigation was led by the European Public Prosecutor’s Office (EPPO) in Berlin (Germany) and Vilnius (Lithuania), and involved 1,000 police officers and tax and customs authorities, who carried out 200 searches in 10 countries.
The investigation focused on a criminal organisation that imported cars considered salvaged for scrapping by US insurers and that were then imported, through a fraudulent scheme, from the States to Europe, from where they were resold after cosmetic repairs, in a criminal scheme that endangers road users and road safety.”
Codenamed “Nimmersatt” (German for Insatiable), the scam extends from the US to Russia, with links to Canada, Hungary, Ireland, and the UK, as well as 11 EU countries in the EPPO area.
The EPPO said that investigative measures were carried out today and Tuesday in Portugal, Bulgaria, Estonia, Germany, Hungary, Latvia, Lithuania, the Netherlands, Romania, and Spain, leading to the arrest of 10 suspects, including one of the alleged leaders – the Lithuanian detained in Madeira.
In addition to these, 18 other suspects, all Lithuanians, were also detained for questioning, and the main suspects of Russian nationality are also under investigation.
These crashed vehicles in the US, explains the EPPO, were sold at auctions or dismantled for scrap and the group bought “huge quantities and then sent them to the European Union “using a network of fictitious companies and false invoices to cover the origin of the cars, which arrived in the EU with their commercial history obscured.”
The cars arrived at different ports, including Antwerp (Belgium), Bremerhaven (Germany), Klaipeda (Lithuania) and Rotterdam (Netherlands), says the EPPO, adding that, “to evade a substantial part of customs duties, the offenders presented false invoices to the authorities, declaring a value much lower than what they paid for the vehicles.
The cars were then transported by land to Lithuania to be repaired in workshops, but based on the research, the repairs were only superficial, to allow them to look pre-owned and go through the required technical certification procedures.
They were then sold to customers in Germany and other EU countries, presented as never having been in an accident or being fully repaired, even though they were missing airbags or had other serious defects and safety problems. The less valuable cars are sold to Eastern European markets.
In Germany, according to the investigation, vehicles are sold by car dealerships that are part of the criminal organisation, which fraudulently apply reduced VAT, under the so-called “margin tax regime,” a provision that allows dealers to pay only on the profit margin when they sell second-hand goods purchased from private individuals.
The EPPO suspects that in Lithuania, members of the group have used Lithuanian companies to “launder” profits from VAT fraud and cash payments from car buyers.
The investigation found that the group’s Lithuanian cell, created in 2020 and headed by the man arrested in Madeira, used companies in Bulgaria, Estonia, Hungary, Latvia, Lithuania, the Netherlands, and Romania “to hide the true turnover”.
In Lithuania alone, at least 16,500 cars were sold, for a total of 144 million euros.
The suspicion of fraud also allowed the destroyed cars to be sold at a lower market price, causing unfair competition.
The investigation revealed an “extremely complex criminal scheme” with ramifications in 18 countries, targeting key members of the criminal organisation from Russia and Lithuania, as well as suspects responsible for importing and transporting the vehicles and dozens of car dealerships.
The damage caused by these criminal activities, which are still being assessed, is estimated at at least 31 million euros.
Freezing orders of 26.5 million euros have been granted through bank accounts and 116 cars (approximately 2.3 million euros), half a million euros in cash and luxury items, as well as real estate, land, and company shares, worth 5.1 million euros, have been seized so far.
The European Public Prosecutor’s Office is the European Union’s independent prosecutor’s office responsible for investigating, prosecuting and prosecuting crimes against the EU’s financial interests.
