More details are emerging about a massive gas trading fraud case in Hungary in which authorities believe dozens, or even more than a hundred companies may have been involved, allegedly defrauding the Hungarian state of tens of billions of forints.

According to investigators, the perpetrators used a seemingly simple VAT fraud scheme connected to the international natural gas market, a sector where normally only companies with significant capital and strong business connections are able to operate.

Based on investigative documents reviewed by Telex, the suspected fraud worked by attaching fictitious electronics trading activities to real natural gas transactions. On paper, the companies traded smartwatches, inverters, earphones, and other electronic products among themselves, even though these goods allegedly never existed in reality.

By referring to these fake purchases, the companies could reduce or even entirely eliminate the VAT they should have paid to the Hungarian state after genuine gas trading transactions. The natural gas itself did enter the market; the suspected fraud appears to have taken place through the invoicing system linked to those deals.

In early 2025, Hungary’s National Tax and Customs Administration (NAV) spoke about VAT fraud worth tens of billions of forints. However, based on the newly uncovered investigative materials, the total damage to the state may have been significantly larger. Investigators currently say it is almost impossible to determine the full extent of the losses.

Gas companies may have been registered under the names of street sweepers and day labourers

The investigation files suggest that many vulnerable people appeared as company directors at the lower levels of the network. Several alleged strawmen previously survived on temporary jobs, while others reportedly lived in homeless shelters or residential social institutions.

Based on witness testimonies, some worked as cleaners, street sweepers, kitchen assistants, construction labourers, or garbage collectors, while companies with multi-billion-forint turnover operated under their names.

One suspect, identified as Mrs. László D., reportedly received a “job opportunity” while working as a street sweeper. She later claimed she was taken to various offices and bank branches where documents were signed in her name. According to her testimony, she did not know that she would later become the managing director or owner of companies generating billions in revenue.

The woman reportedly signed the official record of her interrogation with three X marks because she could neither read nor write. Her daughter accompanied her to the questioning as an assistant.

Investigators also uncovered cases where billion-forint invoices and banking transactions were allegedly issued in the names of official company executives while those individuals were actually in prison. Several people questioned during the investigation reportedly could not even identify the registered address of their own company or the bank where the firm’s account was held.

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Russian connections cannot be ruled out

Experts interviewed by Telex, as well as earlier reports by Válasz Online, say several circumstances suggest that Russian business connections may also have played a role in the background. Some experts say that the real beneficiaries of parts of the massive gas deals may have been linked to Russian interests.

One source who previously worked on VAT fraud investigations said a similar structure had already appeared in Hungary around 2017–2018, although on a much smaller scale. According to the source, investigators were unable to reach the real organisers even then, partly because certain measures were ultimately never carried out.

Experts also say it raises questions how suddenly emerging companies were able to access such enormous volumes of natural gas on the international market. Some believe this may point toward the dominance of Russian gas supplies in the region. Another relevant factor is that OMV only terminated its long-term contract with Gazprom at the end of 2024.

Another possible motive discussed by analysts is that some actors may have tried to maximise sales through intermediary networks before an anticipated loss of market share in Europe.

One additional unusual detail is that while two known suspects in the case were already under arrest, Hungarian tax authorities reportedly continued receiving professionally written statements and forged bank account documents submitted in the names of strawmen during ongoing NAV procedures. According to investigators, this could suggest that the real organisers behind the scheme may still have been actively operating the network at the time.

The alleged scheme resembles so-called “missing trader” or carousel VAT fraud structures previously seen across Europe, often involving electronics and energy trading.

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