More than 55 million euros in unpaid VAT since 2016 and about 45 million euros in unpaid contributions to EFKA, through at least 500 short-lived shell companies and dozens of “straw men,” led to the arrest of Angelos Giannakopoulos, the owner of the “To Horiatiko” bakery chain and dozens of other food outlets. The arrest followed months of investigation by the Greek FBI. According to current estimates, the total damage exceeds 100 million euros.

By Monday, 59 people had been arrested, among them three accountants who were used to set up the shell companies. Police authorities intend to bring all those arrested before the prosecutor by the afternoon. Those arrested also include close associates of the main suspect who have been linked to the operation of nightclubs and beach bars.

At least 520 companies, dozens of people, accountants and alleged straw men are now under scrutiny. More than 400 of the companies linked to Giannakopoulos are in the food and health sector. According to investigators, the shell companies collected the profits of about 200 food outlets, then closed after a short time without paying VAT or social security contributions. However, the fact that about 520 companies are being examined does not mean that all of them are considered shell companies or that they are all involved to the same degree.

The 500 to 700 Euro “Straw Men”: How the Scheme Allegedly Worked

One of the most revealing findings of the investigation concerns the pay of the people listed on paper as company managers. According to information, the so-called “straw men” allegedly received 500 to 700 euros per month to essentially lend their names to businesses, without necessarily having real control over how those businesses operated.

The authorities are examining a mechanism through which companies allegedly built up debts from VAT, social security contributions and other financial obligations, while business activity then continued through new companies.

The previous companies were left with unpaid debts to the state and to EFKA, while official documents listed managers who may have had no real involvement in key business decisions.

The question investigators now need to answer is who gave the orders, who decided on setting up and replacing the companies and, above all, who reaped the financial benefits.

As police sources point out, the person listed as the legal manager of a business is one thing, and the person who may actually be pulling the strings is another.

The 80-Year-Old Accountant and His Daughter: Their Role in the Companies

The case of an 80-year-old accountant, who is among those arrested, is also of particular interest.

According to information, the elderly man handled the setting up of companies in different parts of Greece, helping create the corporate structures under investigation.

According to the same information, much of the paperwork was handled by his daughter, while he signed the necessary documents.

The authorities are now trying to determine whether these actions were simply accounting and administrative services, or whether there was knowledge of, and real participation in, the mechanism.

Alleged Access to State Agencies

A key focus for investigators is the access the ring allegedly had to state agencies, including security services and audit authorities. This access allegedly allowed it to avoid prosecution for years, and it appears to have also provided information about the current investigation.

Senior officials at Hellenic Police headquarters on Katechaki Avenue refer to complex “high-level access” that the ring built up over the years. Because of this information, the main suspect allegedly traveled to Dubai a few weeks ago.

From Dubai to an Arrest in Ioannina

Greek authorities were tracking his movements while he was in Dubai and preparing the operation to arrest him. The constant changes to his return tickets reportedly made planning more difficult.

He returned to Greece after police misdirection appears to have given him the impression that the investigation was limited and had ended after some isolated checks at nightclubs. However, in the last 24 hours before his arrest, he appears to have received new information that he was about to be arrested.

According to information, despite a travel ban reportedly imposed on him in an earlier case, the businessman had been traveling abroad through Albania, driving across the border and then flying to Dubai. Information reportedly obtained through phone surveillance pointed to another upcoming departure, which led police to move the operation forward. He was located on Sunday in Ioannina, where police say he planned to escape to Albania.

How the Investigation Began

The investigation started 10 months ago, based on information gathered from repeated complaints by Mykonos businesspeople, where the main suspect had been active, as well as from investigations by the Anti-Money Laundering Authority. The recent Pizza Fan investigation was considered a dress rehearsal for the much larger operation against the bakery ring.

The Greek FBI’s biggest challenge is not only to record the hundreds of companies in the case, but to prove who exercised real control over them. Hellenic Police spokesperson Konstantia Dimoglidou told MEGA that the investigation is still fully underway due to the very large number of people involved, and that there is not yet a complete picture of all the offenses. She explained that the hardest part in such cases is proving that the person behind a straw man is actually the head of the alleged criminal group.

Police officers, working with the Independent Authority for Public Revenue (AADE), are mapping corporate connections, financial transactions and changes of managers to determine who was making the real decisions.

Police officials say many of the food outlets under investigation have since been sold, mainly to foreign companies, but the investigation focuses on the period before they were sold. The probe also covers other businesses, including nightclubs.

Police operations were carried out in Athens, Mykonos, Rhodes and Volos, with arrests made on the two islands. House searches have so far found less than 200,000 euros in the homes of those involved. The authorities believe a large amount of money is held in safe deposit boxes, which they will request to have opened.

Investigators are also examining whether the same ring was involved in the exploitation of women through adult websites, though that part of the investigation has not been completed. The police spokesperson said that, based on the information available so far, there is no indication of a pimping case in the current investigation.

Greece’s Anti-Money Laundering Authority has also ordered the freezing of assets belonging to defendants in the case, as well as in the separate Pizza Fan investigation. Payroll accounts were explicitly exempted to protect employees’ wages.

The Earlier Trafficking Case

Giannakopoulos had come to the attention of the authorities in the past. He was arrested after the Hellenic Police operation “Lefkos Artos” (“White Bread”) as the alleged leader of a large human trafficking ring centered on well-known Athens nightclubs. The ring was dismantled after an investigation involving Interpol, police security and the National Intelligence Service (EYP).

According to the case file, the ring brought women to Greece mainly from Eastern European countries such as Russia, Ukraine and Moldova. The women arrived on tourist visas and were then forced to work as dancers and in prostitution, either through violence or under the threat that they owed large sums for their transport to Greece.

In 2015, he was sentenced at first instance to 10.5 years in prison for criminal organization, professional human trafficking and money laundering. The court case stated that large sums from the operation of strip clubs were systematically channeled into the bakery chain, which was then expanding, in an effort to legalize the proceeds of illegal activities. Fifteen others were convicted with him, including managers, accountants and associates.

He filed an appeal with suspensive effect and was released. At the Five-Member Felony Court of Appeals, sentences were reduced or some charges were time-barred due to changes in the law, allowing those convicted to remain free. In 2018, he was acquitted in a separate case involving related charges of human trafficking and money laundering.