EPPO

Two suspects were arrested yesterday, at the request of the European Public Prosecutor’s Office (EPPO) in Turin, for their alleged involvement in a VAT carrousel scheme involving the sales of Voice over Internet Protocol (VoIP) services. An order to freeze assets for the amount of €64.04 million was executed.

The Italian Financial Police (Guardia di Finanza) of Imperia analysed the invoices of eight Italian companies trading in the field of VoIP – a technology that allows users to make voice calls via the intranet. The companies allegedly bought VoIP credit from suppliers in several EU countries, including  France, Latvia, and Poland, as well as in non-EU countries like Albania, Chile and the United Kingdom, and subsequently sold the same credits to other Italian companies. 

However, there are sufficient grounds to believe that these companies, between 2017 and 2021, acted as ‘missing traders’ or shell companies established for the sole purpose of evading the payment of VAT. Evidence shows that the legal representatives of all companies were in fact straw men, acting on behalf of two of the suspects. The companies, lacking genuine economic activity, did not keep any accounting documents, nor did they have any operational or organisational structure. The companies issued invoices for non-existent transactions to justify the fictitious transfers, enabling genuinely productive businesses to artificially lower their tax burden and evade taxes. They also never submitted VAT tax returns, even though they had declared transactions for several millions of euros. 
This system enabled the purchased services to be marketed at prices competitive with those of rival companies, undermining the legal economy and disrupting the proper functioning of the markets.

The Guardia di Finanza of Imperia, Naples, Bologna and Ferrara arrested two individuals yesterday, who have been placed under house arrest, while three others have been banned from exercising their professional activities for one year.

The estimated damage, at this point in the investigation, is €64.04 million euro, and a freezing order for this amount was issued by the investigative judge of Bologna. Three real estate properties were seized for a value of almost €900.000. 

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

The European Public Prosecutor’s Office (EPPO) in Rome (Italy) is leading an investigation –code-named ‘Dragone’- into a large-scale customs and VAT fraud scheme involving the import of goods from China into the EU.  

Today, the Italian Financial Police (Guardia di Finanza) of Rome and Florence executed a freezing order of €71.05 million, issued by the judge for preliminary investigations of Florence.  

The freezing order targets 17 suspects (4 Italians and 13 of Chinese origin) who are under investigation for participating in a criminal organisation committing multiple tax offences related to the import of goods, such as clothing, footwear, bags and various accessories. It is alleged that a criminal enterprise of Chinese entrepreneurs created a network of 29 companies operating in the provinces of Florence, Prato and Rome, to evade customs duties and VAT by exploiting Customs Procedure 42 (CP42).  

CP42 exempts importers from paying VAT in the country of importation, if the imported goods are subsequently transported to another EU Member State. Under this procedure, created to simplify cross-border trade, VAT is exempted in the country of importation, when the goods are acquired in the final Member State of destination. 

In this case, the Chinese goods were primarily cleared through customs in Bulgaria, Hungary and Greece and then transported to logistical hubs in Italy. On paper, the goods underwent multiple intra-community transactions between fictitious operators, accompanied by invoices for non-existent transactions. To avoid detection, the companies involved only existed for around two years before being replaced by new ones to allow the fraudulent scheme to continue. 

The investigation also revealed that the criminal group provided clandestine money transfer services to the Chinese community living in Italy, bypassing regular financial intermediaries and charging a percentage for the transactions. 

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 Bologna (Italy), a new freezing order of €950 000 was executed against a company involved in the import of stainless steel coils, suspected of evading customs duties.

Earlier in this investigation, a freezing order of approximately €2.4 million had already been executed by the Italian Financial Police (Nucleo di Polizia Economico Finanziaria - Guardia di Finanza) of Ferrara, bringing the total of assets frozen to over €3.3 million. 

Two companies are under investigation. According to the evidence gathered during searches in Ferrara, Varese, Milan and La Spezia, the two companies made false declarations on 110 imports about the origin of their products to the customs agency in Ferrara. The administrators allegedly certified that the steel originated from South Korea when, in reality, the product was of Chinese origin. By doing so, the companies benefited from customs duty exemptions on goods from South Korea, evading the payment of nearly €2,4 million in additional  customs duties introduced by the EU’s 2019 anti-dumping regulation.

Further inquiries uncovered an additional 60 import operations carried out by one of the companies under investigation, with the same ‘modus operandi’, causing an estimated damage of €950 000 euros in customs duties. This amount, subject to this new seizure order, was found and frozen in the company’s bank accounts.

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

 In an investigation into a complex VAT fraud on imported fuels, led by the European Public Prosecutor’s Office in Bologna (Italy), the Modena Italian Financial Police (Guardia di Finanza) seized assets worth €5 million in the provinces of Modena and Ravenna this month.

At stake is a suspected 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 value-added tax (VAT). 

The investigation originated after a tax inspection by the Guardia di Finanza Economic Financial Police Unit of Modena, which revealed that the suspected company had imported fuel at a particularly advantageous price through a fraudulent chain of so-called missing traders – shell companies established for the sole purpose of evading the payment of VAT.

Afterwards, the suspected company allegedly sold the fuel to petrol stations far below market prices, thus obtaining an unlawful advantage over honest economic operators.

It is estimated that the scheme caused a damage to the Italian budget of nearly €14 million. 

At an earlier stage of the investigation, searches have been carried out at the company’s headquarters and €120 000 in cash was found inside the car used by the company’s legal representative.

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 Palermo (Italy), the Italian Financial Police (Guardia di Finanza) carried out searches in the provinces of Palermo, Trapani, and Naples today. As part of the action, 14 suspects were arrested, two were placed under house arrest, and assets worth approximately €1 million were seized.

The suspects are believed to be members of international criminal associations active in the illicit trade of 22 tonnes of cigarettes between both North Africa and Eastern Europe, and Italy, causing €850 000 in financial damage to the EU due to unpaid customs duties. If the cigarettes had not been confiscated during a previous action, the criminal associations would have generated a profit of €4 million by selling them on the market.

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