EPPO

On behalf of the European Public Prosecutor’s Office (EPPO), the Italian Financial Police (Guardia di Finanza) have executed a freezing order of up to €20 million, in an investigation involving the public company that operates the water service in Palermo (Italy).

The investigation began after the European Investment Bank (EIB) filed a complaint with the EPPO, regarding a loan agreement granted to the public company of the municipality of Palermo responsible for managing the drinking water distribution and the sewage system for the entire province.

In 2020, the public company received a loan of €20 million from the EIB, funded by the European Fund for Strategic Investments (EFSI) and guaranteed by the European Union. The loan agreement, signed on 20 December 2017, concerned an investment programme for drinking water production and wastewater treatment.

According to the investigation, however, the company deliberately omitted information from the EIB that would have shown it did not comply with environmental legislation, as was required for obtaining the loan.

Specifically, between 2017 and 2020, the public water provider committed serious and repeated violations of environmental regulations, which led the judge for preliminary investigations of the Court of Palermo to appoint, on 26 May 2021, a judicial commissioner for the ‘Environment and Purification’ sector of the company. There was also, subsequently, a request to indict those responsible.

The failure to report these facts prevented the EIB from carrying out assessments to confirm whether the company complied with the conditions for obtaining the loan.

The crime under investigation is undue receipt of public disbursement, aggravated by the fact that the suspects are public officials.

At the request of the EPPO, on 15 May 2023 the judge for preliminary investigations of the Court of Palermo issued a freezing order against three public officials and the public company, up to the amount of €20 million, in order to recover the damages to the EU budget.

The judicial order was executed today, 25 May 2023, by the Guardia di Finanza – Comando Provinciale di Palermo.

At the request of the European Public Prosecutor’s Office (EPPO) in Rome (Italy), the judge for preliminary investigations of the Tribunal of Foggia issued a freezing order of over €420 000, in an investigation into fraud involving the European Maritime and Fisheries Fund (EMFF).

The freezing order was issued against an Italian company, as well as its legal representative and the ‘de facto’ manager of the company, and was carried out by the Guardia di Finanza (Italian Financial Police) – Sezione Operativa Navale in Manfredonia (Puglia region).

The investigation unveiled a suspected fraud aimed at obtaining public funds intended for financing the new construction or the expansion of mussel farming plants.

According to the investigation, the company’s mussel farming facilities had already been entirely built and were operational in 2017, when the application for financing was submitted to the EMFF 2014/2020 Operational Programme. The programme provided subsidies of up to 50% of the eligible expenses, based on the costs incurred by the beneficiaries.

The suspects are believed to have submitted false cost estimates and accounting documents, in order to mislead the authorities of the Puglia region.

In early May, the European Public Prosecutor’s Office (EPPO) in Turin (Italy) seized money and real estate with a value of €530 000 from an agricultural company in the village of San Pietro Mosezzo (Piedmont region). Three people are under investigation for aggravated fraud and embezzlement to the detriment of the EU budget.

The Novara Command of the Guardia di Finanza (Italian Financial Police) executed the preventive seizure order issued by the Judge for Preliminary Investigations at the Court of Novara.

It is alleged that the agricultural company that manages the major farm, unduly benefited from a grant to be used for the construction of rice dryers. The grant is part of the resources made available within the framework of the EU’s Common Agricultural Policy (CAP).

According to the investigation, the agricultural business, which was established only after the publication of the call for applicants, was awarded the grant as it was made up of five major farms. This was a decisive factor in obtaining a higher score for the distribution of the grant.

It is also believed that only some members of the consortium used the rice dryers built with the received funds, as the others already owned similar machines, which had been recently built and/or modernised.

Thanks to further forensic analysis, potential proof of embezzlement was found. It emerged that the constructed rice dryers had been used by companies outside the consortium. By doing so, the consortium partners disregarded the exclusive use of the rice dryers specified in their contract.

As a result, it is alleged that over €500 000 in EU contributions was unlawfully obtained, and parts of the profit deriving from the undue use of the rice-drying equipment went to companies outside the consortium.

The CAP makes up more than 30% of the EU budget, and Italy is the leading rice-producing country in Europe. The Piedmont region ranks first nationally in the production of this cereal, which, for the province of Novara, represents a flourishing economic sector.

The European Public Prosecutor’s Office (EPPO) in Palermo (Italy) has seized over €700 000 in assets against seven suspects and their companies, in an investigation into fraud involving national and EU agricultural funding aimed at supporting the conversion to organic farming.

The freezing order, issued by the Judge for Preliminary Investigations at the Court of Catanzaro (Calabria), was executed today, 5 May 2023, by the Catanzaro Provincial Command of the Guardia di Finanza (Italian Financial Police).

The crimes under investigation are aggravated fraud for obtaining public funds, and false statements in a public deed. The suspects are believed to have presented false certifications concerning the requirements to be awarded the non-repayable funds – thus misleading the paying agency, which granted the sums now subject to the freezing order. In particular, the suspects are understood to have falsely certified that they did not have prior convictions or pending tax debts, that they met the requirements to be considered a young agricultural entrepreneur and that the quality of their activities was recognised by the competent health department.

The total amount obtained by the suspects was €713 377.61, granted by the Calabrian Region under the  partly EU-funded Rural Development Programme (RDP) 2014/2020. In order to recover the damages to the national and EU budgets, the Italian Financial Police, on behalf of the EPPO, has seized the bank accounts and real estate of the suspects under investigation.

This morning, 21 April 2023, the Carabinieri of Palermo (Italy) executed restrictive measures of house arrests against three suspects, issued by the judge for preliminary investigations of the Court of Palermo. This is based on the findings of an investigation into embezzlement and corruption, led by the European Public Prosecutor’s Office (EPPO) in Palermo.

Between February 2022 and April 2023, the EPPO Investigative Section of the Carabinieri Provincial Headquarters in Palermo collected strong circumstantial evidence against two public officials – a public school principal and her deputy – who are alleged to have embezzled both EU and national funds, related to various public school projects in a socially deprived area.

According to the investigation, the suspects falsely declared the number of pupils at a school to justify Programma Operativo Nazionale (PON) projects, which are EU-funded scholarship programmes for public school students. These projects were never, or only partially, implemented.

In addition, the investigators discovered that significant amounts of food supplies and expensive computer and technological devices – which were intended for the students – had been stored inside the office of the principal, and were then misappropriated by the principal and by her deputy. 

The investigative activity also unveiled that the school’s principal entrusted the supply of technological material to one single company, represented by the third suspect.. It is understood that, by paying bribes, this company kept the monopoly over the supply of technological material provided to the school.

This type of crime reflects an abandonment of duty towards improving the prospects of disadvantaged communities, for the pursuit of private interests – and can cause severe damage to the educational purposes and successful outcome of numerous projects financed by the EU.

The exact amount of damages to the EU’s financial interests is still to be determined, due to the need to examine the relevant documents of the numerous projects carried out by the suspects.

The damages are currently estimated at over €100 000.