VAT Fraud and Terrorist Funding -- The Azizi Extradition Allegations Part I

Abstract

On April 14, 2015 Samir Azizi, a 25 year old German/Afghan citizen, was extradited from the United States to Germany. The Extradition Compliant alleged (in 89 criminal counts) that Azizi had denied the German Treasury €61,104,368 in VAT revenue with 12 distinct Missing Trader Intra-Community (MTIC) fraud schemes. At the time of arrest the 26 year old Azizi admitted that his involvement in MTIC frauds stretched back even before 2008, the initial reference year of the Complaint. This paper assesses the Azizi extradition in two parts. The first part considers the first 26 criminal counts, representing alleged VAT losses of €15,302,965 from four MTIC schemes. The second part considers the remaining €45,801,403, in 63 criminal counts involving an additional 8 companies. Underlying both parts of this assessment is a fundamental (but unanswered) question: “Who exactly is Samir Azizi? Is he the mastermind of a multi-million euro VAT fraud, a fundraising fraudster for terrorist organizations, or a youthful face of convenience used to disguise the intentions and involvement of a larger criminal organization?” The most troubling aspect of this case (more troubling than the financial losses) are the further allegation that is underscored by Judge Howard R. Lloyd in his Extradition Order that “… there were also indicators that perpetrators were using the VAT procured through such fraud, not only for personal enrichment, but also to finance terrorism.”