A major international fraud operation involving the smuggling of goods from China through the port of Piraeus has been dismantled by the European Public Prosecutor’s Office (EPPO), ostensibly dealing a serious blow to organized criminal networks that have cost the European Union and Greek state an estimated €700 million in lost customs duties and VAT.
The operation, codenamed “Calypso,” revealed a sophisticated criminal scheme orchestrated by networks primarily composed of Chinese nationals. These networks systematically imported millions of products into the European market—ranging from textiles and shoes to electric scooters and e-bikes—while evading import duties and VAT.
Coordinated Raids Across Europe
The investigation, coordinated by EPPO branches in Athens, Madrid, Paris, and Sofia, uncovered illegal activities stretching across several EU member states. In Greece, under the oversight of the local EPPO office and with support from the Hellenic Police and Greece’s Independent Authority for Public Revenue, multiple arrests and property seizures were carried out.
File photo: Boxes of contraband cigarettes seized on Friday, April 27, 2018, at the port of Thessaloniki by the Independent Public Revenues Authority.
Five individuals were arrested in Greece, including two customs officials, a customs broker, and owners of customs clearance firms. They face serious criminal charges related to financial crimes against both the EU and Greek public finances.
Across the operations in Greece, France, and Spain, authorities seized €5.8 million in various currencies and digital assets. In Greece alone, €4.75 million was confiscated, including funds in Hong Kong dollars, digital wallets, and cryptocurrencies. Authorities also secured 7,133 e-bikes, 3,696 e-scooters, and 480 shipping containers awaiting further inspection at the Piraeus port.
Luxury assets were also seized, including 11 properties in Spain, 27 vehicles, and high-end goods such as designer handbags, watches, and jewelry. In Greece, court orders were issued to freeze additional assets, including real estate, yachts, and bank accounts.
How the Scheme Worked
The criminal operation exploited the EU’s customs regime using a web of fraudulent practices. Goods were imported primarily through the port of Piraeus, using falsified documentation to undervalue or misclassify items in order to reduce customs duties.
A network of brokers, logistics providers, and accounting firms, many operating with Greek VAT numbers but registered in countries like Bulgaria, facilitated the initial customs clearance. The goods were then “sold” to companies in other EU countries, triggering an exemption under the EU’s Customs Procedure 42 (CP42), which allows for VAT-free imports if goods are transferred to another member state.
However, the so-called buyers were often fake or shell companies—”missing traders”—that never actually received the goods. In some instances, legitimate company identities and VAT numbers were fraudulently used to disguise the transactions.
In reality, the goods were diverted to warehouses controlled by the criminal groups and eventually distributed—largely via the black market—in countries including France, Italy, Poland, Portugal, and Spain. These logistics hubs operated almost like closed communities, accessible only to trusted members of the criminal organizations.
Transportation documents were destroyed immediately after delivery, and goods were sold for cash, keeping the entire operation off the books.
Money Laundering and Criminal Profits
The illegal profits were funneled back to China using underground banking systems that also served other criminal enterprises. These laundering techniques helped conceal the full scope of the fraud—from the moment the goods entered Europe to the final cash transaction on the street.
The total damage currently under investigation is approximately €700 million: more than €250 million in unpaid customs duties, which directly impact the EU budget, and almost €450 million in unpaid VAT, affecting both EU and national revenues.
