EPPO

At the request of the European Public Prosecutor’s Office (EPPO) in Palermo (Italy), the Italian Financial Police (Guardia di Finanza) have executed a seizure order against a farm suspected of agricultural funding fraud, with estimated damages of €530 000.

The suspect under investigation is an agricultural company located in the municipality of Caronia (province of Messina). According to the evidence, the suspect declared to be in possession of numerous agricultural land parcels, located mostly in the Nebrodi national park, allegedly resorting to false lease contracts, bearing the signatures of unsuspecting owners, who were unaware of the fraudulent scheme.

In this manner, the suspect is believed to have unduly obtained €530 000 in EU funds from the Italian agricultural payments agency AGEA (Agenzia per le erogazioni in agricoltura).

At the request of the EPPO, the judge for preliminary investigations in Patti, Sicily, ordered the preventive seizure of assets for the sums unduly received, a precautionary measure that was executed by the Guardia di Finanza of Sant'Agata di Militello. Several properties and payment entitlements from AGEA were seized, worth around €260 000.

The precautionary measure was issued based on the evidence collected during the preliminary investigation. All persons concerned are presumed to be innocent until proven guilty in the competent Italian courts of law.

On 20 June 2023, the Italian Financial Police (Guardia di Finanza) seized around €650 000 in assets from one of the suspects in investigation ‘Cheap Ink’, led by the European Public Prosecutor’s Office (EPPO) in Venice (Italy). The suspect, an entrepreneur from Bolzano, is believed to be part of a criminal organisation that sold office supplies at cheap prices by fraudulently avoiding VAT payment, with profits estimated at €58 million.

The judicial order comes in the wake of previous proceedings in investigation ‘Cheap Ink’. Earlier this year, on 26 January 2023, 18 suspects were arrested, including two entrepreneurs of Paduan origin (father and son), believed to be the promoters of the fraudulent scheme.

The investigation has taken a new turn in recent months, bringing to light the role of the entrepreneur from Bolzano, who is believed to have originally been in business with the top leaders of the criminal association. According to the evidence, he later distanced himself from the ringleaders to set up an autonomous VAT fraud scheme, benefitting a company he owned and another company of which he was the commercial director, both based in the province of Bolzano.

This new scheme, which generated profits of at least €650 000, appears to be similar to the one uncovered in the first phase of the investigation –  which involved the use of shell companies to import into Italy significant quantities of stationery and consumables for printing equipment, making it impossible to recover the due VAT.

It is believed that, upon learning about the arrest of the Paduan entrepreneurs, the entrepreneur from Bolzano started to dispose of the assets in his name, simulating, among other things, the separation from his wife, in order to save the house he owned from a possible court order.

In order to recover the damages to the national and EU budgets, the Italian Financial Police (Nucleo di Polizia Economico Finanziaria Bolzano – Guardia di Finanza) have seized money, company shares, five cars and the suspect’s house.

On behalf of the European Public Prosecutor’s Office (EPPO) in Venice (Italy), the Italian Financial Police (Guardia di Finanza) – Provincial Command of Piacenza have arrested the suspected ringleader of a VAT fraud scheme involving several countries, with estimated losses of €28 million.

The order of detention of the Italian suspect, based in the Emilia-Romagna region, but actually living in Poland, was issued by the judge for preliminary investigations of the Court of Padua and executed between 4 May and 9 May 2023.

The investigation, conducted by the Economic and Financial Police Unit of Piacenza, gathered evidence of the existence of a criminal association aimed at committing 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). According to the investigation, the illegal proceeds were then subsequently laundered.

It is alleged that the association, operating as a criminal group, purchased electronic products abroad, using a series of fictitious companies based in Italy and in the European Union, in order to evade the payment of VAT. The investigation uncovered 70 shell companies (34 based in Italy, and the remainder in Austria, Belgium, Bulgaria, Czechia, Germany, Latvia, Lithuania, the Netherlands, Poland, Slovakia, Slovenia and Spain), as well as more than 20 persons implicated.

It is understood that the scheme made it possible to generate millions in VAT credits. The sales of technological and IT products at a much lower price than that charged by honest businesses (in some cases, with discounts of up to 50%) also increased the illicit profits.

At the request of the EPPO, the judge for preliminary investigations of the Court of Padua ordered the freezing of assets of more than €28 million, in order to recover the damage to the national and EU budgets. The shares of a company belonging to the suspected ringleader, as well as real estate located in a historic building in the centre of Bologna, were seized.

VAT carousel fraud, or Missing Trader Intra-Community (MTIC) fraud, is the most profitable crime in the EU, costing around €50 billion annually in tax losses to the Member States, according to the latest estimate by Europol. 

At the request of the European Public Prosecutor’s Office (EPPO), three private building contractors were placed under house arrest today, 05 June 2023, on suspicion of fraud involving the renovation of a public school in Palermo.

The precautionary measures, issued by the judge for preliminary investigations of the Court of Palermo, were executed by the Carabinieri of Palermo, following the findings that emerged during the investigation.

The inquiry was carried out between November 2021 and June 2022 by the EPPO Investigative Section of the Carabinieri Palermo Provincial HQ.

On the radar of the EPPO is a project for the renovation and maintenance of a public school in Palermo, financed by the European Union Structural Funds 2014-2020. According to the evidence, the three private building contractors, working in conspiracy with each other, are responsible for aggravated fraud of public expenditure funds, both national and EU.

The suspects are alleged to have used a chain of illegal subcontracts and fictitious billing, while carrying out part of the renovation only on paper, in order to obtain undue financial advantage from the European Union.

In addition, according to the evidence, in some cases, the renovation works were carried out by unqualified workers, which could affect the safety of students and school staff. In particular, the fire escape doors were installed on non-compliant frames and with inefficient release mechanisms.

It was also documented that the floor renovation of the school restrooms, while invoiced in full, was, in fact, only executed on paper.

In addition to the house arrests, the Carabinieri also executed a freezing order of the financial assets of the building companies, for a total amount of €140 000.

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

In an investigation into fraud involving EU subsidies for the use of grazing land, coordinated by the European Public Prosecutor’s Office (EPPO) in Venice (Italy), a freezing order of up to €171 000 was executed today, 26 May 2023.

The freezing order was issued on 16 May 2023 by the judge for preliminary investigations at the Court of Trento, against a company based in Trentino and four individuals, for amounts allegedly unduly received from 2020 to 2021.

The investigation originated in a probe launched by the Carabinieri Command for Forestry (Carabinieri Forestali) of Brescia, in the summer of 2020, in the context of so-called ‘pasture fraud’ – a scheme involving fake contracts claiming ownership of plots of land, in order to defraud the EU of subsidies for the use of grazing land.

Two companies are under investigation: a cooperative based in L'Aquila and another company based in Trentino-Alto Adige. Its administrators allegedly drafted and submitted false contracts claiming they had management rights to lands located in the municipalities of Saviore dell'Adamello (Brescia) and Valdaone (Trentino), in order to obtain subsidies provided by the Common Agricultural Policy (CAP) of the European Union, within the direct payments and rural development support programme.

The judge of the Court of Trento also ordered the freezing of the titles to CAP rights held by the company based in Trentino, with a value of around €55 000.