EPPO

Investigation ‘Greasy Hands’, led by the European Public Prosecutor’s Office (EPPO) in Turin (Italy), is targeting a criminal organisation alleged to have imported vehicle lubricants to the Italian market while systematically evading VAT, causing a loss of over €15 million.

Searches and judicial measures were executed today by the Italian Financial Police (Guardia di Finanza) in the provinces of Bari, Campobasso, Foggia, Matera and the regions of Rome, Trieste and Turin. Simultaneously, investigative measures were also carried out in Latvia. Judicial measures have been taken against 14 individuals, including the suspected ringleaders. Eight of the suspects will remain in pre-trial detention, and six have been placed under house arrest. 

Over 470 tonnes of lubricating oil were seized during the searches, which involved cash dogs – canine units specialised in searching for currency. A freezing order of €15.4 million is also being executed against the suspects. 

At the heart of the fraudulent scheme, according to the investigation, is a criminal association formed of individuals operating in Italy, as well as in Belgium, Czechia, Estonia, Hungary, Poland, Slovakia and Slovenia, who introduced and marketed large quantities of lubricating oils for cars and trucks, intended for consumers in the Italian market. Based on the evidence, the criminal organisation used multiple strategies to evade VAT and the payment of excise duties, including forged transportation documents and a network of shell companies.

The criminal group is also suspected of counterfeiting motor oil brands and laundering the illicit profits.

The investigation additionally indicates that a company operating in the Matera area, which is one of the main hubs for the sale of vehicle lubricants in central and southern Italy, also sourced oil from the criminal association, concealing over €52 million in profits from the tax authorities.

It is estimated that the illicit activities of the criminal organisation caused a loss of €14 million in unpaid VAT and over €1 million in excise duties, during the 2017–2023 period.

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 Rome (Italy), the Italian Financial Police (Guardia di Finanza) of Bari is carrying out searches today, in an investigation into an €8.8 million fraud in the training sector. 

The searches are being conducted at the home of two suspects living in Bari and at the premises of several companies. 

At issue is an investigation into fraud related to training activities carried out by a number of training institutions, with the financial support of the EU. One of the suspects is the manager of several private training institutions, and the other one is his sister, who works as a teacher at the institutions.

Between 2019 to 2022, the suspects received public funds under the Youth Guarantee Programme, to the amount of €8.8 million, aimed at combatting unemployment and ensuring the integration of young people into employment. However, based on the evidence, the majority of the training courses did not take place. 

The suspects are being investigated for aggravated fraud to obtain public funds, as well as the issuing of invoices for non-existent transactions.

Given the extraordinary public interest in its investigation code-named ‘Resilient Crime’, the European Public Prosecutor’s Office (EPPO) wishes to clarify some technical elements that have been subject to misinterpretation: 

Last week, 4 April 2024, the EPPO informed about arrests and freezing order related to investigation ‘Resilient Crime’ targeting a criminal organisation alleged to have set up a sophisticated fraudulent scheme with damage to both the EU and Italian budgets. 

According to this EPPO investigation, the suspects involved in this scheme managed to obtain €600 million worth of tax credits from the Italian authorities, by providing false information and forged documents and invoices. Tax credits, that could potentially also be funded by the RRF, are a tax incentive that allows the beneficiary to deduct the amount of the credit they have accrued from the total they owe the state in their future tax declarations. 

It is understood, based on the evidence gathered so far in our investigation, that the suspects also directly applied for funding from the Italian National Recovery and Resilience Plan (NRRP) –  part of the EU’s Recovery and Resilience Facility (RRF) for Italy and the main pillar of the NextGenerationEU recovery plan.

The ‘Resilient Crime’ investigation does not concern €600 million worth of RRF funds, but a highly complex fraudulent scheme, also targeting RRF funds, with estimated total potential damages of more than €600 million to both the Italian and EU budgets.

Further information will follow in due course, once the investigation has reached a phase in which more details can be released.

At the request of the European Public Prosecutor’s Office (EPPO) in Palermo (Italy), a freezing order of €226 000 was executed today against three farmers suspected of misappropriation of EU agricultural funds and forgery of documents.

According to the evidence, the suspects falsely declared, in their applications to the Italian Agricultural Payments Agency (AGEA), that they were in possession of agricultural land parcels in the province of Messina – and are understood to have used forged documents, including false lease contracts for this purpose. In this manner, the suspects are believed to have unduly obtained, between 2018 and 2022, around €199 000 in EU agricultural funds and 144 payment entitlements worth €27 000.

At the request of the EPPO, the judge for preliminary investigations of the Court of Barcellona Pozzo di Gotto issued a freezing order of assets for the sums unduly received, which was executed today by the Carabinieri Agri-food Protection Department of Messina (Reparto Carabinieri Tutela Agroalimentare di Messina). Several properties, movable assets and payment entitlements from AGEA were seized, worth around €226 000.

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

 In an investigation led by the European Public Prosecutor’s Office (EPPO) in Bologna (Italy), the Italian Financial Police (Guardia di Finanza) of Bologna and Prato have executed a freezing order of €7.3 million on the bank accounts of a freight forwarding company suspected of VAT fraud relating to the illegal importation of fabric from China.

Today, 80 law enforcement officers of the Guardia di Finanza are also conducting numerous searches, with the support of three canine units with cash-dogs in the provinces of Prato, Bologna and Ferrara. 

The investigation currently focuses on eight individuals and seven companies, suspected of evadingVAT payment on the importation of more than 13 600 tonnes of textiles, worth around €63 million, from China into the European Union. The suspects are the owners and managers of customs shipping companies in the provinces of Prato and Bologna, operating with Chinese entrepreneurs who are also under investigation for the same offences. They are suspected of smuggling, ideological forgery, and the issuing and use of invoices for non-existent operations.

The investigation, conducted by the Guardia di Finanza with the support of the Italian Customs and Monopolies Agency (Agenzia delle Dogane e dei Monopoli), revealed that the importers, despite having lodged customs declarations for this purpose, omitted to move their goods to so-called ‘tax warehouses’ – a system that would have suspended the payment of the import VAT at that time. If done correctly, the VAT would have been paid later, when the goods were exiting the tax warehouse. Instead, the imported goods were moved directly to the warehouses of the companies under investigation, thus allowing them to be immediately released to the importers, in breach of customs regulations and without paying the VAT due.

The estimated VAT loss caused by this criminal scheme is more than €13 million. The judge for preliminary investigations of the Court of Bologna ordered, at the request of the EPPO, a freezing of assets worth €7.3 million.

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