EPPO

Last Monday (6 February), the Naples Carabinieri Investigative Unit seized over €50 000, in an investigation by the European Public Prosecutor’s Office (EPPO) in Naples into possible fraud involving EU agricultural funds.

According to the investigation, the suspect had obtained funds from the Campania Rural Development Programme (PSR Campania) for an integrated youth activity project by forging the documentation when applying for the funds.

The European Public Prosecutor’s Office (EPPO) in Venice (Italy) yesterday seized €1.6 million, in an investigation into suspected fraud concerning the development of futuristic mobile water treatment machines, funded by the EU.

The freezing order comes in the wake of an intensive investigation, code-named ‘Water Diviner’. This investigation began in 2020, and concerned three Italian citizens and two companies, suspected of aggravated fraud against the European Union.

At stake is a start-up that promised to develop mobile water treatment machines, powered by solar energy, supposedly equipped to purify and filter water in remote areas, while also providing internet connectivity and a charging station for mobile devices.

The futuristic-looking prototypes, presented in order to secure access to EU funds, were touted as autonomous machines, capable of producing their own energy while providing clean water, electricity and Internet services to populations in developing and underdeveloped countries, thereby ensuring the well-being and sustainability of the planet.

The project received EU contributions amounting to €1.6 million, granted by the research and innovation programme ‘Horizon 2020’, as well as from the Regional Operational Programme and the European Regional Development Fund (ROP EDRF 2014/2020).  

Despite the promises made, the water treatment plants were never finished, nor were the so-called ‘thermodynamic machines’ ever operational, according to the evidence collected. To cover up the project’s failings, the suspects are believed to have provided fraudulent assurances to the European Commission certifying the functionality and the advancement of the project, including false water analysis results. 

In addition, they are suspected of violating tendering rules and providing false statements to gain access to European Union funds amounting to €113 000, paid by the ROP EDRF 2014/2020 programme in the Friuli-Venezia Giulia region.  

In order to recover the damages to the EU Budget, the judge for Preliminary Investigation of the Court of Udine, at the request of the EPPO in Venice, ordered the preventive seizure of money, financial assets, vehicles and shareholdings of the suspects, to an amount of €1.6 million.

The order, which included the seizure of the prototypes of the ‘thermodynamic machines’, already under probative seizure, was executed yesterday by the Italian Financial Police (Guardia di Finanza) of Udine, with the cooperation of the EPPO’s offices in Madrid and Paris.

The investigation had its origin in a report by the European Anti-Fraud Office (OLAF), who first relayed two possible cases of aggravated fraud to the EPPO.

Furthermore, a financial control of the Spanish company involved in the project indicates that it failed to declare its permanent presence in Italy, thus avoiding the payment of fiscal duties to the Italian revenue authorities. It also failed to report its workers, mainly of Italian nationality, to the national tax authorities.

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

Today, the Italian Financial Police (Guardia di Finanza) in Palermo is carrying out a preventive seizure order of over €7 million, requested by the European Public Prosecutor’s Office (EPPO) in Palermo. The suspects had obtained funds from the Sicilian Rural Development Programme (PSR Sicilia) to construct a livestock farming complex with an attached slaughterhouse. According to the investigation, they issued invoices with a higher price than the actual price of their expenses, which led to inflated invoices of over €12 million (incl. VAT).

The officials of the Sicilian Region, who were misled by the alleged over-invoicing, consequently attributed undue public contributions of over €5 million to the company. In addition, the estimated damages of the tax fraud stand at almost €2 million, as the suspects are understood to have created a system of invoicing between several companies, and to have collected the VAT for the higher prices. Hence, a preventive seizure order of over €7 million was issued to recover the damages. 

The European Union contribution to the Sicilian Rural Development Programme (PSR Sicilia) amounts to 45%, and is financed by the European agricultural fund for rural development (EAFRD).

At the request of the European Public Prosecutor’s Office (EPPO) in Naples (Italy), the Italian Financial Police (Guardia di Finanza) of Salerno seized over €160 000 on 26 January, as part of an investigation into possible fraud involving EU agricultural funds.

At stake are benefits granted to an agricultural entrepreneur in the province of Salerno, under the Rural Development Plan for the Campania region – the so-called ‘Integrated Youth Project’.

The investigation showed anomalies in the documents submitted by the suspect in order to obtain the financial contribution. In particular, the size of the farm is actually smaller than what was declared by the suspect, to match the minimum requirements set for the funds.

The investigators also found discrepancies between the actual crops cultivated in some land parcels, and those that were indicated in the application for the funds. In addition, a building under construction on the premises, ostensibly a warehouse, seems to have been intended instead as a villa to house two families.

Since an advance payment of €163 031 had already been made to the suspect, the EPPO requested the preventive seizure order of an equivalent amount from the competent Judge for Preliminary Investigations (€60 000 on a bank account and the remaining €100 000 by seizure of a property), in order to recover the damages to the EU budget.

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.

In an operation code-named ‘Cheap Ink’, the European Public Prosecutor’s Office (EPPO) in Venice (Italy) today detained 18 suspects, believed to be part of a criminal organisation selling office supplies at cheap prices by fraudulently avoiding VAT payment, with profits estimated at €58 million.

The investigation started in 2020, following targeted administrative checks against a number of companies operating in the trade of stationery and consumables for printing equipment. The extremely cheap prices charged for these products, not in line with the market, had aroused suspicions from the Italian Financial Police (Nucleo di Polizia Economico Finanziaria Bolzano –Guardia di Finanza).

Subsequent investigations revealed the existence of a complex fraud scheme involving more than 30 suspects who, using a network of companies located mainly in the Triveneto region, but also in numerous EU countries, handled the importation of these products into Italy, systematically failing to pay VAT.

The VAT evasion allowed the group to resell the imported products – mainly toners for professional printers, but also stationery – at extremely advantageous prices, distorting the principles of fair competition on the market.

Two entrepreneurs of Paduan origin, who remain in custody, are believed to be the promoters of the scheme, which involved using destitute people as ‘straw-men’ for around 30 companies, making it impossible to recover the due VAT. The assets of both suspects, amounting to €26 million, are being seized by Court order.

According to the investigation, the profits of the fraud allowed the suspects to acquire huge personal assets, including a Ferrari and other luxury cars, as well as valuable real estate.

The group is also suspected of laundering money through lucrative investments in Italy and abroad, in tourism, catering, real estate and cryptocurrencies.

At the request of the EPPO, the Judge for Preliminary Investigations of the Court of Padua issued the following coercive measures for the suspects arrested during today’s operation: three will remain in prison, eight under house arrest and three in compulsory residence. In addition, four suspects were banned from the exercise of executive offices of legal persons and enterprises.

In order to recover the damages to the national and EU budgets, the court ordered the preventive seizure of money and financial assets, vehicles and real estate to a total value of approximately €58 million, to be executed against 19 individuals and 20 companies. Shareholdings of eight companies are also being seized.

Today’s operation involved 30 searches carried out mainly in Veneto, but also in other northern Italian regions, by more than 100 Financial Police officers and ‘cash dogs’ – canine units specialised in searching for currency.

The investigation, which was ongoing for more than two years and was coordinated by the EPPO, involved the South Tyrolean Financial Police officers, in cooperation with investigative units from Czechia, UK, Poland, Austria, Slovakia, the Netherlands and Germany.