EPPO

At the request of the European Public Prosecutor’s Office (EPPO) in Venice (Italy), two individuals were arrested today in Italy, on suspicion of orchestrating an €8.8 million VAT fraud involving the trade of cleaning products and alcoholic and non-alcoholic beverages. The Italian Financial Police (Guardia di Finanza) of Verona also executed a freezing order, at the EPPO’s request, targeting bank accounts, real estate and other assets.

The judge for preliminary investigations of the Court of Verona has ordered the house arrest of the two suspects. They are suspected of VAT carousel fraud – a complex criminal scheme that takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value-added tax – with estimated losses to the EU and national budgets of at least €8.8 million.

The investigation centres on two companies, active in the trade of cleaning products and alcoholic and non-alcoholic beverages, with headquarters in Verona.

According to the evidence, the suspects employed a variety of fraudulent tactics, including fake invoices for non-existent goods and fictitious transactions via legitimate Bulgarian, Croatian, Hungarian and Slovenian companies – which were managed by Italian nationals. It is understood that afterwards, these companies resold the same products to so-called missing traders in Italy – shell companies established for the sole purpose of evading the payment of VAT. 

Based on the investigation, the cleaning products and beverages therefore appeared to pass through several countries outside Italy, when in fact, they were only ever distributed directly in Italy. 

It is understood that the missing traders in Italy would vanish without fulfilling their tax obligations, while other companies in the fraudulent chain would subsequently claim VAT reimbursements from the national tax authorities. It is believed that this allowed the suspects to sell products at artificially low prices, undercutting legitimate competitors and resulting in VAT losses amounting to over €8.8 million.

All persons concerned are presumed to be innocent until proven guilty in the competent Italian courts of law.

At the request of the European Public Prosecutor’s Office (EPPO) in Milan (Italy), the Italian Financial Police (Guardia di Finanza) in Varese have arrested two main suspects and executed a freezing order against seven companies under investigation for a major VAT carousel fraud involving luxury cars. Around €7.6 million has been frozen in bank and financial assets, real estate, land and cars. 

The investigation, codenamed ’Easy Car’, gathered evidence of fraudulent activities in the luxury car market in Italy. It is alleged that the suspects committed so-called intra-community VAT ‘carousel’ fraud – a complex criminal scheme that takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value-added tax (VAT).

It is understood that the fraud scheme involved the sale of 1500 cars from Italy to Czechia, Germany and San Marino,  falsely declaring them as intra-community supplies. These cars were then brought back to Italy and registered as Italian cars. It is alleged that as a consequence, the suspects evaded VAT payments, amounting to €7.6 million, on new vehicle registrations, as they falsified the origin of the vehicles.

The total value of invoices for non-existent transactions is around €20 million. The investigative measures have targeted a total of 17 individuals and seven companies.

The judge at the Tribunale di Varese, responding to the EPPO’s request, ordered the house arrest of the two main suspects and a freezing order of approximately €7.6 million. 

All persons concerned are presumed to be innocent until proven guilty in the competent Italian courts of law.

At the request of the European Public Prosecutor’s Office (EPPO) in Turin (Italy), two suspects were arrested last Thursday, in a probe into possible fraud involving €1.6 million in loans for the development of drones, guaranteed by the European Investment Fund (EIF). 

The suspects are managing a start-up in the field of research and development of drones for commercial use. According to the investigation, the suspects simulated a significant increase of the start-up’s share capital, in order to obtain two loans from an Italian bank, for an amount of €800 000 each. These loans, aimed at developing the company’s activities, were guaranteed by the EIF to up to 80%. 

Based on the evidence, the suspects presented false balance sheets and falsified accounting documents – relating to the amount of share capital effectively deposited as guarantee for creditors – in order to obtain the loans. 

The suspects were about to receive another loan, also guaranteed by the EIF, to the amount of €3 million. The timeliness of the investigation prevented the disbursement of these funds. 

The suspects were arrested by officers of the Italian Financial Police (Guardia di Finanza). Law enforcement agents also carried out searches at the company’s premises and the suspects’ homes. A freezing order of approximately €1.3 million (the amount still owed by the company), issued by the investigative judge of Alessandria, was also executed. Five real estate properties were seized, with a combined worth of over €1 million. In addition, five bank accounts in the name of the suspects were frozen, for a total amount of €213 000.

The crimes under investigation include two counts of fraud, false accounting and money laundering. 

All persons concerned are presumed to be innocent until proven guilty in the competent Italian courts of law.

At the request of the European Public Prosecutor’s Office (EPPO) in Milan (Italy), the Italian Financial Police (Guardia di Finanza) have executed a freezing order against a company suspected of a major customs fraud involving the importation of electric bicycles (e-bikes) from China, with an estimated damage of over €9.8  million. 

The EPPO investigation was opened following a report by the Guardia di Finanza in Monza, outlining suspicions that customs violations had been carried out by an Italian company since 2019. 

It is alleged that the company imported complete e-bikes of Chinese origin into the EU, but in unassembled form (in parts) and in separate shipments, in order to avoid the payment of the extra customs duties introduced by the EU’s 2019 new anti-dumping regulation. It is understood that the company thereby evaded, between 2019 and 2022, the payment of anti-dumping and customs duties and VAT amounting to over €9.8 million.

On 20 October 2023, the EPPO office in Milan filed a request for the freezing of €5 039 260.08 against the suspected company. This figure is the amount in customs duties and relevant VAT understood to have gone unpaid since 30 July 2020, when company liability for such offences was introduced into Italian law. On 8 July 2024, the judge for preliminary investigations of the Court of the Milan accepted the request and issued a freezing order that is currently being executed.

All persons concerned are presumed to be innocent until proven guilty in the competent Italian courts of law.

 At the request of the European Public Prosecutor’s Office (EPPO) in Naples (Italy), the Italian Financial Police (Guardia di Finanza) of Naples have executed a freezing order amounting to €1.3 million against four companies and their respective legal representatives, suspected of fraud, embezzlement and money laundering.

At issue is a Naples-based company ostensibly operating in the field of administrative consultancy, which successfully applied in 2022 for two projects financed by EU funds. One of the projects involved a €300 000 loan for ‘the development of e-commerce for SMEs in foreign countries’, of which €150 000 was disbursed. The other involved a €1.3 million grant for SMEs (small and medium-sized enterprises), which was almost fully disbursed and financed by the Recovery and Resilience Facility (RRF). 

Based on the evidence, the company, lacking operational headquarters, employees, and utility contracts, submitted falsified financial statements for 2019 and 2020 in order to secure the €300 000 loan. It is understood that for the €1.3 million grant, the same company, with an auditor’s assistance, submitted entirely fictitious data to the paying agency. These documents were intended to simulate foreign operations, a prerequisite for the funding. 

According to the investigation, following the crediting of the funds, the company transferred the entire amount  to three companies within Italy and to bank accounts in Belgium, Bulgaria, Lithuania and the United Kingdom. It is alleged that the legal representatives of the recipient companies were aware of the funds’ illicit origin and intended to obstruct their traceability, as evidenced by the absence of commercial relations between the companies.

At the request of the EPPO, the judge for preliminary investigations in Rome ordered the seizure of assets amounting to €1.3 million, based on the evidence collected. The assets seized include a Harley-Davidson motorcycle, two cars, and real estate properties in Stintino (Sardinia) and Rome.

All persons concerned are presumed to be innocent until proven guilty in the competent Italian courts of law.