A nationwide operation named Hermes led to the detention of 39 suspects in Portugal as part of a European anti-fraud effort involving the PJ, the European Public Prosecutor’s Office, the Tax Authority and the GNR, targeting a large-scale VAT carousel fraud in mobile phone trade.

Authorities conducted 12 searches across Cyprus, Greece and Italy, seizing assets including bank balances, vehicles and real estate, with assets frozen or seized valued up to €80,000.

Investigators allege the group ran a VAT carousel scheme using companies and 'missing traders' in Germany, Albania and Sweden, with estimated tax losses of €80 million in Sweden and €34 million in Germany.

Detained individuals are expected to appear at Lisbon’s Central Investigation Court for an initial judicial interrogation to assess pre-trial measures.

Suspects are to be brought to Lisbon and presented at the Central Criminal Investigation Court on Thursday for questioning.

Key roles are attributed to: Andy, founder of the invoicing mechanism; Chris, an aide distributing illicit funds; Blondie (Tall George), the group’s banker who created P-Exec and Rivalz; and Little George, a former KPMG employee analyzing accounts and money flows.

CNN Portugal initially reported the news before local outlets carried the information via Lusa.

Suspects are expected to be questioned by the Central Criminal Investigation Court as part of the proceedings.

The EPPO emphasizes suspects are presumed innocent until proven guilty and frames its role as investigating and prosecuting crimes against the EU’s financial interests.

The investigation is part of a broader framework known as Midas, with cross-border cooperation and ongoing proceedings in German courts; suspects’ individual criminal responsibility has not yet been publicly established.

Prosecutors say those detained held central roles in coordinating the illicit network; authorities are auditing ledgers, digital transaction files and corporate ownership to trace capital movements and identify other participants.

The investigation focuses on the use of EU funds, specifically Recovery and Resilience Facility programs.