Hungary’s National Tax and Customs Administration (NAV) has launched a major operation against an alleged criminal network involved in supplying ventilators and medical masks to the state during the Covid-19 pandemic.
Arrests and assets seized across two countries
The investigation concerns companies that sold medical equipment to the Ministry of Foreign Affairs and Trade, then led by Péter Szijjártó, and other state bodies in deals worth HUF 15.6 billion (EUR 40 million at the time).
According to NAV, the suspects allegedly generated more than HUF 3 billion in profits from the transactions, then used a network of companies and fictitious invoices to evade over HUF 660 million in tax. The operation took place in several locations across Hungary and, with international assistance, in Austria in the early hours of 27 October.
Overpriced contracts and shady companies
The contracts, signed in 2020, resulted in the delivery of 800 ventilators and three million medical masks from China. Investigators allege that the network created a structure of companies with no genuine business activity to conceal profits and reduce the VAT payable on the equipment sales.
According to the tax authority, companies within the network issued false invoices for purported IT services, allowing the businesses involved to claim unjustified reductions in their tax liabilities. Some of the profits were allegedly transferred to a company registered in the United Arab Emirates, while the remainder was withdrawn in cash in Hungary.
NAV shared the video of the operation
During the operation, authorities seized or froze assets worth HUF 1.5 billion. One man was arrested in Austria under a European Arrest Warrant and taken into custody. Eleven other people were questioned as suspects in Hungary, two of whom were also detained.
An international arrest warrant has been issued for another alleged leader of the network, who investigators believe may currently be in Indonesia. NAV is investigating suspected large-scale budgetary fraud committed as part of a criminal organisation, money laundering and other offences. The allegations have not been established by a court.
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Separate investigation into overpriced ventilators
The case also raises questions about the controversial procurement of medical equipment during the pandemic, when Hungary spent heavily to secure supplies amid global shortages. The National Bureau of Investigation is conducting a separate criminal investigation into the procurement itself, examining suspected breach of trust, possible overpricing and whether the equipment was suitable for its intended purpose.
The distinction is significant: the tax investigation focuses on the alleged concealment of profits and evasion of tax by companies involved in the transactions, while the separate inquiry examines potential wrongdoing connected with the purchase of the equipment.
The latest operation marks a significant development in scrutiny of the pandemic-era deals. However, the authorities have not announced that Péter Szijjártó or the ministry’s officials are suspects in the tax case, and the available statement does not establish that the minister personally directed or knew about the alleged tax scheme.
The investigations are continuing, with the authorities seeking to trace the money and establish the responsibilities of those involved.
