EPPO arrests 11 over fuel fraud

Special units entered a villa in Brandenburg. Customs investigators moved on warrants in Poland. Latvian authorities detained suspects. By the end of the coordinated operation, 11 people had been arrested across three EU member states (Tag24).

The case is being run by the European Public Prosecutor's Office, better known as EPPO: the EU body with the power to investigate and prosecute crimes against the Union's finances across borders. For Malta, a country whose economic model depends heavily on clean access to the single market and whose financial services sector has already felt the cost of reputational damage, this is not a distant Brussels story. The file, called "Water into Wine," concerns an alleged international network suspected of large-scale VAT fraud through diesel trading (EPPO).

Lubricant on Paper, Diesel in Practice

The alleged fraud was built into paperwork, not hidden in lorries at a border post. Fuel entered Germany from Poland declared as lubricating oil, which carries a lower tax treatment, and was then relabelled and sold as diesel (EPPO, Tag24). The profit came from the difference between what the product was called on paper and what it became in the market.

In an earlier phase, EPPO charged six defendants, alleging that more than 3,000 fuel deliveries generated fraudulent VAT deductions of €23.7 million (EPPO). German reporting on the latest raids cited alleged losses of around €45 million in VAT and more than €90 million in excise tax, though those figures remain allegations and have not been independently verified (Tag24). This is money that should have gone into national budgets, meaning hospitals, roads, enforcement agencies and the everyday public services taxpayers fund.

One Prosecutor, Three Countries

Before EPPO, a case running through Germany, Poland and Latvia would have depended on three national investigations stitched together through mutual legal assistance requests. That process can work, but it is slow and vulnerable to gaps. EPPO, created through Council Regulation 2017/1939, changes the mechanism: its prosecutors operate inside national legal systems but under one EU structure.

National officers still carry out the raids. National judges still authorise warrants. The difference is that one office can decide that evidence gathered in three member states belongs in the same file.

That matters because VAT fraud is designed to exploit borders inside a market that otherwise functions without them. In a typical cross-border scheme, shell companies buy goods tax-free in one EU country, charge VAT when selling them domestically, and then disappear before paying the tax due. The Commission estimates that this kind of fraud drains between €12.5 billion and €32.8 billion from member states each year.

Diesel is a useful product for such schemes. It moves in large volumes, looks the same across borders, and sits inside excise categories that can be manipulated if the paperwork is falsified (Europol). For small states such as Malta, the lesson is familiar: once a loophole is profitable, the business model travels quickly.

Too Few Prosecutors, Too Many Gaps

EPPO has 182 prosecutors covering 24 of the EU's 27 member states (RTÉ). Three countries remain outside the system, including Ireland. That gap is not technical. EPPO official Andrés Ritter recently warned that Ireland could attract shell companies used in cross-border fraud because investigators there cannot use EPPO's direct cross-border tools (The Irish Times). Where the prosecutor cannot reach, fraud has room to settle.

The other weakness is data. VAT records still sit mainly with national authorities, which means EPPO prosecutors cannot always follow a suspicious transaction cleanly from one country to the next. The EU Council, where member-state ministers negotiate and adopt legislation, has provisionally agreed to give EPPO better access to Eurofisc, the EU network for sharing VAT-fraud intelligence between tax authorities. Final adoption is still pending (Brussels Times).

Better access would turn the tempo of investigations. A relabelled fuel shipment could be traced across borders in days rather than months. For a country like Malta, which has lived through the FATF grey-listing and knows how quickly a compliance weakness becomes a national problem, that distinction is not academic.

At the end of 2025, EPPO reported 3,602 active investigations with estimated damage of €67.27 billion (EPPO). That is the workload facing 182 prosecutors.

What Remains Unproven

The public record is still limited. Authorities have not said how many of the 11 arrests took place in each country. They have not published company names, suspect roles, or details of assets seized in this latest wave. All suspects are presumed innocent.

EPPO can now build cases that would once have been much harder to assemble. The harder question is whether 182 prosecutors, spread across a continent and carrying more than 3,600 open files, can turn coordinated raids into convictions. This diesel case will show how far the EU's new prosecutorial machinery can go when the fraud itself was built to move faster than national borders.