European authorities have launched a major cross-border investigation into an alleged criminal organisation suspected of selling more than one million used mobile phones as new devices. Announced on 29 September 2026 by the European Public Prosecutor’s Office (EPPO), the investigation, code-named Troja, estimates that the alleged scheme caused at least €300 million in losses to consumers and more than €30 million in VAT losses across EU member states.

According to investigators, the phones were assembled using used components in Hong Kong and the United Arab Emirates, then cleaned, packaged and shipped to the Netherlands as new products. They were subsequently transported to warehouses in Germany and sold to consumers across the EU through online marketplaces. Authorities carried out more than 160 searches and seizures in 19 countries, with seven suspects arrested, including the alleged leaders of the organisation.

The investigation also concerns the alleged misuse of the VAT margin scheme, which allows eligible resellers of second-hand goods to account for VAT on their profit margin rather than the full selling price. Investigators suspect that shell companies in several European countries used this mechanism fraudulently to increase profits on devices marketed as new. The allegations remain subject to the ongoing legal process.

The case highlights the importance of traceability and transparency in the refurbished electronics market. Legitimate second-life devices can help extend product lifespans and reduce electronic waste, but consumer confidence depends on accurate product descriptions, verifiable device histories and compliance with applicable tax rules. Clear distinctions between new, used and refurbished products are essential to ensuring that circular commerce remains trustworthy.