Greece Seeks Freeze on Foreign Accounts in €120 Million Fraud 

by · Greek City Times

Greek authorities have requested the freezing of two bank accounts in Ireland and Denmark as part of an ongoing investigation into an alleged large-scale tax fraud and money-laundering operation involving the Choriatiko (Χωριάτικο) bakery chain and hundreds of other businesses managed by its 58-year-old owner, whom investigators identify as the alleged leader of a criminal organisation.

The Directorate for Combating Organised Crime submitted the request through the Hellenic Police’s International Police Cooperation Directorate. Investigators suspect the organisation systematically evaded taxes and social security contributions while laundering millions of euros through a network of businesses and foreign bank accounts.

Authorities identify €6 million in foreign accounts

The two accounts stand in the names of foreign women whom authorities have not arrested. One has reportedly fled to Romania and the other to Germany.

Investigators found that the accounts were linked to point-of-sale (POS) terminals used by businesses in Greece. The organisation allegedly channelled proceeds through these accounts before transferring the money back to Greece as foreign remittances. It then used the funds to purchase property, tourism businesses and other assets.

Read more: Police Arrest Bakery Chain Owner in €100 Million Tax Fraud Probe

Authorities have reportedly identified approximately €6 million in the two accounts. However, they expect the total amount to be considerably higher as the parallel investigation by Greece’s Anti-Money Laundering Authority examines additional bank accounts and safe-deposit boxes.

Network operated 433 businesses across Greece

According to findings from the police investigation, the organisation operated 433 businesses, mainly in Attica, Rhodes and Mykonos.

Of these, 340 were food-service and entertainment establishments, including bakeries, cafés, coffee bars, entertainment venues, nightclubs and strip clubs. The remaining businesses included personnel-hire companies and other commercial operations.

The organisation coordinated its extensive network from its headquarters in Attica, where an informal accounting office operated within its premises. A separate specialist accounting firm also supported the operation, with branches in Mykonos and Rhodes.

Investigators say the organisation relied on more than 100 front men and women, supported by a close-knit group responsible for overseeing business operations, establishing legal entities and paying the nominees who formally owned or managed the companies.

The organisation reportedly paid its front men and women around €1,000 a month. Many came from financially disadvantaged backgrounds or had health problems, making them vulnerable to exploitation. Investigators also found that the network listed fictitious individuals or deceased people as managers of certain businesses.

Rhodes beach concessions formed part of the scheme

The investigation has revealed that the organisation controlled 28 beach concessions on Rhodes alone. Police arrested 14 of the 59 suspects identified so far on the island.

Investigators allege that the network manipulated public tenders for beach concessions administered by the Hellenic Public Properties Company and other state property authorities.

The organisation allegedly submitted exceptionally high bids through companies registered in the names of front men, effectively discouraging competing bidders. In one example cited by investigators, a company secured a beach concession with a starting price of €100,000 by offering €1 million for a three-year lease.

The company would typically pay the first instalment and then stop making payments for the remainder of the lease. Authorities would eventually record the outstanding debts with the relevant tax office, while the municipality could initiate procedures to remove the operator.

Before enforcement measures could recover the money, the organisation allegedly suspended the company’s operations, leaving the debts in the name of the front man. It would then enter another tender through a new legal entity registered to a different nominee and repeat the process.

The same method allegedly left unpaid social security contributions and other liabilities with individuals who had no assets, preventing the state from recovering the money.

In another scheme, the organisation secured premises at selected beach concessions for periods of up to 10 years and subsequently sublet them to companies.

Companies concealed the owner’s control

Investigators allege that the 58-year-old suspect used his accounting offices to establish private capital companies, known in Greece as IKE, in the names of front men, often without their knowledge of the full arrangements.

The network then opened bank accounts and established businesses that other members of the organisation secretly operated for the alleged leader’s benefit.

According to police sources, the principal objective was to evade obligations to the state while shifting legal and civil liability onto the nominal owners and managers.

The organisation allegedly used foreign bank accounts, including accounts in Iceland and Denmark, linked to the businesses’ POS terminals to conceal its revenue. Members then transferred the funds to companies controlled by senior figures in the organisation and presented the money as income from abroad.

The network allegedly used the proceeds to purchase properties, land, vehicles and investment products.

Investigation identifies approximately €120 million in unpaid obligations

Police estimates indicate that, over the decade covered by the investigation, the organisation systematically failed to meet obligations totalling approximately €120 million.

The estimated losses and unpaid liabilities comprise:

  • €38.8 million in unpaid employer social security contributions to Greece’s EFKA social security agency.
  • €38 million in debts relating to state repayable advances and payroll taxes.
  • €43 million in concealed taxable income, including unpaid value-added tax (VAT) and income tax.

Investigators say the organisation adapted its methods to the type of business it operated, consistently seeking to avoid payments to the state.

The investigation remains ongoing, with authorities examining additional accounts and assets to establish the full scale of the alleged operation.

(Source: AMNA)

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