EPPO

In the context of an international large-scale investigation led by the European Public Prosecutor’s Office (EPPO) in Venice (Italy), dozens of searches and seizures took place, and 22 arrests were made today in Italy, Austria, Romania and Slovakia, in a probe into an alleged criminal organisation suspected of defrauding €600 million from the EU’s Recovery and Resilience Facility (RRF) for Italy.

In Italy, the Financial Police (Nucleo di Polizia Economico Finanziaria – Guardia di Finanza) from Venice executed an order for freezing issued by the pre-trial judge on assets worth, in total, over €600 million. With the support of law enforcement agencies from the other Member States involved, 22 individuals have been arrested in Italy, Austria, Romania and Slovakia. Eight suspects have been placed under pre-trial detention, whereas other 14 suspects are held under house arrest, and one accountant was prohibited from practising his profession. The premises of the suspects and of the investigated companies have also been the target of searches and seizure of evidence.

On the radar of the EPPO is a criminal association suspected of orchestrating, between 2021 and 2023, a fraud scheme to obtain funds from the Italian National Recovery and Resilience Plan (NRRP), part of the RRF, the main pillar of the NextGenerationEU recovery plan.

In 2021, the members of the criminal association applied for receiving non-repayable grants to support digitalisation, innovation and competitiveness of small and medium-size companies, with the purpose of expanding their business activities to foreign markets. The suspects allegedly created and deposited false corporate balance sheets to show that the companies were active and profitable, whereas in fact they were non-active, fictitious companies. 

It is alleged that a network of accountants, service providers and public notaries supported the suspects to successfully obtain €600 million in non-refundable funds from the Italian NRRP in the timespan of two years. The suspects transferred the funds to their bank accounts in Austria, Romania and Slovakia as soon as they received the advance payments.

The subjects under investigation used advanced technologies, such as VPNs, cloud servers located abroad, crypto-assets and artificial intelligence software, in order to carry out the fraudulent conducts and to conceal and protect the illegal business.

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 Palermo (Italy), the Italian Financial Police (Guardia di Finanza) of Sant'Agata di Militello have executed a seizure order against a baker suspected of agricultural funding fraud, with an estimated damage of €320 000.

The suspect under investigation is the owner of a bakery located in the municipality of Torrenova (province of Messina). The baker had applied for €800 000 from the European Regional Development Fund (ERDF), intended to modernise and expand the production of his bakery and to be used for baking bread and other baked goods using ancient Sicilian grains. 

According to the evidence, the bakery had used a first advance payment of €320 000 for different purposes than what it was intended for. Instead, the money was allegedly used for online trading. Thanks to the timely intervention in this investigation, the subsequent payment of €480 000 by the regional authorities was prevented.

At the request of the EPPO, the judge for preliminary investigations in Patti ordered the preventive seizure of bank accounts based on the evidences collected.

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 Palermo (Italy), a freezing order of over €470 000, issued by the judge for preliminary investigations of the Court of Agrigento, was executed today against four farmers suspected of fraud involving EU agricultural funding, forgery of documents and money laundering. 

Money, real estate, cars and funds received from the Italian Agricultural Payments Agency (AGEA) and financed by the Common Agricultural Policy (CAP) were seized by the Carabinieri Agri-food Protection Department of Messina (Reparto Carabinieri per la Tutela Agroalimentare di Messina). 

According to the investigation, the suspects falsified statements and falsely declared ownership and possession of lands in the province of Agrigento, misleading the AGEA in order to obtain agricultural funds.

The investigation demonstrated that the suspects were not the actual owners of the land, part of which was already judicially confiscated in another criminal proceeding. Another part of the land they asked subsidies for was owned by the Italian Institute of Services for the Agricultural and Food Market (ISMEA), but the suspects continued to declare it as their property in the applications for the subsidies. 

Between 2015 and 2022, the suspects obtained around €450 000 in EU subsidies and over €20 000 in payment entitlements directly from AGEA.

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

A coordinated sting by the European Public Prosecutor’s Office (EPPO) in Naples, Bologna and Rome (Italy) today dismantled a criminal gang alleged to have imported fuel to the Italian market while systematically evading VAT. The investigation, code-named ‘Fuel family’, has led to judicial measures against eight individuals, including the suspected ringleaders. A freezing order of approximately €300 million was also executed against 59 suspects and 13 companies, who are understood to be part of the fraudulent activity.

At the heart of the criminal scheme, according to the investigation, is a criminal association formed of at least ten suspects, some of whom are linked by family ties, operating a massive VAT fraud in the fuel trading sector, with branches in Italy and abroad. Five of these suspects were placed under house arrest and three will have to report regularly to the police. They are suspected of the crimes of VAT fraud, criminal association and money laundering.

According to the investigation, the fuel was imported from suppliers located in Croatia and Slovenia, as well as other countries, using a chain of more than 40 missing traders in Italy, which would vanish without fulfilling their tax obligations. At the top of the fraudulent commercial chain is a company located in Rovigo and a warehouse in Magenta. According to the investigation, the majority of the fuel was actually delivered to that warehouse and the rest to distributors. 

Based on the evidence, the fraudulent activities generated invoices for simulated transactions amounting to over €1 billion, causing an estimated damage of around €260 million in unpaid VAT. The criminal group is also suspected of laundering over €35 million of the illicit proceeds, using bank accounts of companies located in Hungary and Romania. This money would ultimately be handed over in cash to the perpetrators of the fraud, following systematic bank withdrawals. 

The VAT evasion also allowed the group to resell the fuel at extremely advantageous prices, distorting the principles of fair competition on the market.

Today’s searches were carried out by the Economic and Financial Police Unit of the Italian Financial Police (Nucleo di Polizia Economico-Finanziaria della Guardia di Finanza) of Naples, Rome, Caserta, Rovigo and Verbania.

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

In an investigation into a complex cross-border VAT fraud involving fuels imported to the Italian market, led by the European Public Prosecutor’s Office in Bologna (Italy), assets worth €2.4 million have been seized in Romania.

This comes in addition to previous seizures executed in Italy, worth €19.9 million, which did not cover the whole damage to the EU budget caused by the fraudulent activities under investigation, estimated at €92 million. For this reason, when the European Delegated Prosecutors in Bologna found assets of one of the suspects located in Romania, they requested their colleagues in Bucharest to seize them, which was promptly carried out, thanks to the operational model of the EPPO as a single office. 

Under the judicial order, issued by the judge for preliminary investigations of the Court of Parma at the request of the EPPO, law enforcement officers seized 18 properties located in Bucharest, belonging to the suspect. In addition, 14 bank accounts were frozen, as well as shareholdings in Romanian companies operating in real estate and in the fuel trading sector, all with a total combined worth of €2.4 million. 

The investigation concerns a suspected criminal group led by three individuals, all Italians, working from Dubai, Miami and Naples. They are suspected of having introduced petroleum products into the Italian territory from refineries in Croatia and Slovenia for their subsequent resale at a low cost, using a string of shell companies and a buffer company. According to the investigation, the fuel was sold to companies in Romania and the United Kingdom and then invoiced to Italian shell companies, all managed by members of the criminal organisation. The evidence indicates that the fuel products were actually sold to a company based in Parma, believed to have committed Missing Trader Intra-Community (MTIC) fraud – a complex criminal scheme that takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from VAT. This allowed the company to resell the petrochemical products below market prices, through 17 unbranded petrol stations located in the provinces of Brescia, Ferrara, Lodi, Modena, Parma, Piacenza, Reggio Emilia and Verona – thus obtaining an unlawful advantage over honest economic operators.

It is estimated that the scheme caused a damage to the tax administration of more than €92 million, relating to unpaid tax since 2016. The assets located in Romania belong to the legal representative of the company under investigation in Parma. 

The freezing order was executed in Romania under the provisions in Article 31 of the EPPO Regulation, which allow for faster cross-border investigations. According to these provisions, the EPPO’s European Delegated Prosecutors are able to request their colleagues in other participating Member States to undertake specific investigation measures, in a faster and more comprehensive manner than under the traditional judicial cooperation methods.

In Italy, the previous seizures were carried out by the Italian Financial Police (Comando Provinciale della Guardia di Finanza – Parma), under the direction of the EPPO. In Romania, the freezing order was executed by police officers from the EPPO Support Structure in that country. 

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