Author: Annalisa Trabbia
Committee: Investigations & Activities Committee
Date: 16/02/2025
On November 14, 2024, an unprecedented operation exposed one of the largest VAT fraud schemes in European history, resulting in losses exceeding €520 million to public finances.
The investigation, known as “Moby Dick”—named for its complexity and massive scale, akin to the hunt for the legendary white whale—was led by the European Public Prosecutor’s Office (EPPO) and uncovered a vast criminal network operating across multiple countries, including Italy, Bulgaria, Spain, Slovakia, as well as other EU and also non-EU nations.
The operation not only highlighted the enormous scale of financial fraud in Europe, but also revealed a much deeper and more concerning issue: the infiltration of organized crime into the financial sector, exploiting weaknesses in the European tax system.
Through sophisticated schemes, these criminal groups used VAT fraud to siphon off massive amounts of money from national treasuries, with ripple effects that destabilized the economic stability of entire countries.
What makes “Moby Dick” particularly alarming is that it goes beyond tax fraud. It exposes the growing of a more dangerous phenomenon: mafia organizations infiltrating financial crimes.
Mafia clans, particularly Italian ones—such as the Calabrian ‘Ndrangheta and the Sicilian Cosa Nostra—but also those from other nationalities, such as Bulgarian, Spanish, and Slovak criminal groups, were found to be directly involved in orchestrating and benefiting from these illicit operations.
These criminals, which have historically profited from trafficking in drugs, arms, and human beings, have now expanded their operations into the financial sector, taking advantage of the lucrative opportunities provided by the European Union’s tax loopholes.
The Operation:
The large-scale investigation, led by EPPO, uncovered a VAT fraud scheme involving transaction worth over €1.3 billion in electronic goods between 2020 and 2023. The direct damage to the European Union, its member states and its citizens has been estimated at over €520 million.
More than 160 searches were carried out in more than ten countries, with hundreds of police officers involved, preventing criminal organizations from reinvesting the illicit proceeds into other criminal activities. Investigative measures are going on across several countries, including Bulgaria, Croatia, Cyprus, Czechia, Italy, Luxembourg, the Netherlands, Slovakia and Spain.
A total of 195 individuals are under investigation, with 43 currently in custody: 34 will remain in prison and 9 under house arrest. Seven European arrest warrants (requested by EPPO) were issued for suspects located in Bulgaria, Czechia, the Netherlands, Spain and also non-EU countries. Additionally, four suspects were temporarily banned from engaging in commercial activities.
Furthermore, authorities have frozen over €520 million in assets, including 129 bank accounts, 192 properties and 44 luxury vehicles and boats.
Laura Kövesi and the Acknowledgment of European MAFIAS:
During the presentation of the operation “Moby Dick”, European Chief Prosecutor Laura Kövesi made a strong and unequivocal statement about the increasing convergence between organized crime and tax fraud. She emphasized that this case is not just an example of the fight against VAT fraud but also a concrete step against mafia infiltration into financial crime.
Kövesi stated: “It has been some time since we started sounding the alarm about dangerous organized crime groups heavily involved in fraud against the EU budget… now we have shed light on a first such case.”
Her words underscored the urgency of tackling the growing link between organized crime and economic fraud, reinforcing that these are no longer two separate worlds: “There is no division between the world of truly bad criminals smuggling drugs and trafficking people on one side; and the world of white-collar crimes” . She confirmed the fact that financial crimes have now become one of the preferred areas for mafias.
The “Moby Dick” operation, as we might expect, is not limited to uncovering large-scale tax fraud, but it reveals a troubling landscape where criminal groups, traditionally operating in other sectors, are now involved in new illicit financial activities. By exploiting loopholes in European tax system, these groups have orchestrated highly sophisticated fraud schemes, causing a severe financial damage and an undermining of the economic stability of the European Union.
Kövesi herself acknowledged that only such powerful criminals (with vast financial resources and extensive connections) could operate on this scale. “Moby Dick” operation is therefore a concrete response to this growing threat, a fight that aims not only to counter tax fraud but to eradicate the entrenchment of mafias in legitimate financial sectors, a phenomenon that represents a serious and immediate threat to the internal security of the EU and its economic integrity.
The proof of the importance of this phenomenon lies in the fact that Laura Kövesi’s speech marked the first time that the media and the EPPO made such a clear reference to the MAFIA, exposing the dangerousness of these criminal groups.
At this point, European Union itself has recognized the power of these criminal organizations, which paradoxically operate without borders (as demonstrated in the “Moby Dick” investigation), while the most effective legal tools to combat them remain largely limited to Italy.
Unlike other European countries, the Italian legal system includes a specific offense of mafia-type association (Article 416-bis of the Penal Code), which is distinct from the general offense of criminal association. This provision not only imposes harsher penalties but also grants authorities more effective investigative tools, making it a crucial weapon in the fight against organized crime.
The gap between the transnational nature of these criminal groups and the limitations of individual national legal systems highlights the need for a more coordinated and decisive response at the European level. It is therefore desirable that, through the work of the EPPO, progress can be made toward greater alignment of national criminal laws, potentially leading one day to the adoption of a true “European 416-bis.”
European collaboration in the fight against financial crimes:
The financial sector has now become a lucrative new frontier for the mafias. Criminal organizations, traditionally involved in activities such as drug trafficking, arms dealing, and human trafficking, have rapidly adapted to the highly profitable opportunities offered by economic crime.
Tax fraud and money laundering now play a crucial role in expanding their influence, allowing them to accumulate enormous wealth while avoiding the direct law enforcement risk associated with traditional criminal activities.
For this reason, international and inter institutional cooperation is essential to halt these large criminal chains that threaten not only legitimate economies but also the internal security of individual member states and the European Union as a whole.
A key factor in the success of operation “Moby Dick” was the involvement of Europol, which provided crucial strategic and operational support throughout the entire investigation led by the EPPO. Collaboration between various European law enforcement agencies and judicial authorities allowed for the effective coordination of such a large-scale operation, ensuring the tracking and the monitoring of criminal activities across multiple countries.
Among the most important contributors were the Italian authorities, particularly the “Guardia di Finanza” and the “Polizia di Stato”, whose role was fundamental in carrying out investigations and arrests. The strength of the operation lies in its ability to unite forces; facilitating the exchange of vital information between agencies from different countries, ensuring a unified approach to combatting economic crime.
A strong message against financial crime:
The fight against economic crime is long and complex, but the “Moby Dick” operation has sent a clear and powerful message: European authorities are determined not to leave space for the mafias within the financial system. Despite the sophisticated nature of these fraudulent schemes and the vast criminal network involved, international cooperation has proven to be a powerful tool in dismantling even the most complex financial crimes.
The experience of this operation demonstrates that by joining forces, sharing intelligence and strengthening cross-border investigations, authorities can successfully disrupt and defeat even the most well-organized anche financially capable organizations.
The EU and his institutions (with the support of every member state) must remain vigilant and continue to stay on this path.