Trial of Kazanovskis Accused of Large-Scale VAT Fraud to Resume in August

Riga, June 20. The Economic Affairs Court (ELT) is set to resume proceedings in early August against Kaspars Kazanovskis, whom prosecutors allege led a VAT fraud syndicate. Kazanovskis faces charges of tax evasion exceeding €1.4 million and subsequent money laundering.

The case was initially investigated by the Latvian State Revenue Service (VID) Tax and Customs Police and transferred to the European Public Prosecutor's Office (EPPO) in January last year. The elaborate scheme involved trading electronic goods, causing approximately €297 million in losses to the budgets of Austria, France, Germany, and Latvia. If convicted, Kazanovskis could face up to 10 years in prison for tax evasion and up to 12 years for money laundering.

Kazanovskis was initially detained but later released on €40,000 bail. This case is part of the international operation "Admiral 2.0," which involved 624 law enforcement officers from 16 countries. In Latvia, over 200 investigators from VID, the Internal Security Bureau, the State Police, and the Corruption Prevention Bureau participated. During the operation, more than 300 searches were conducted, and 32 individuals were arrested across the Baltic states.

The criminal syndicate operated through a chain of shell companies across 16 EU member states. Online sales of popular electronic devices exceeded €1.48 billion, but the VAT paid by consumers was never remitted to tax authorities. Instead, funds were funneled to offshore accounts. Investigators believe over 400 companies were involved, potentially linked to drug trafficking, cybercrime, and investment fraud.

Financial intelligence identified possible influence from Russian organized crime. Searches resulted in the seizure of smartphones worth over €47.7 million, luxury cars, jewelry, gold watches, weapons, drugs, and €126,965 in cash. Authorities froze 62 bank accounts across multiple countries, with a combined total of €5.839 million frozen in Latvia, Lithuania, Estonia, and Poland.

Kazanovskis has a previous conviction for defaming a VID official, which was appealed after he was sentenced to 140 hours of community service and ordered to pay €5,000 in compensation. He also gained notoriety under his former surname Caune for reckless driving and flaunting his extravagant lifestyle on social media. Among those arrested in the operation was Valdis Spurķis.