ITALIAN FINANCIAL POLICE ARREST 11 SUSPECTS IN €25 MILLION VAT FRAUD SCHEME

Rome, May 15, 2024

In a major crackdown on tax fraud, the Italian Financial Police in Rome have arrested 11 suspects and seized assets worth up to €25 million as part of an investigation into a Value-Added Tax (VAT) fraud scheme involving the sale of electronic goods.

Operation Details

The operation was carried out at the request of the European Public Prosecutor’s Office (EPPO) in Rome and Turin. Investigators alleged that the suspects, a group of entrepreneurs and accountants, formed a criminal organization that employed various fraudulent tactics to carry out the scheme.

Fraudulent Tactics

• Issuing fake invoices for non-existent goods
• Fictitious transactions via foreign-based companies
• Acting as “missing traders” - shell companies established solely for evading VAT payments

The Scheme

According to investigators, this allowed them to sell electronic products at artificially low prices, undercutting legitimate competitors and resulting in VAT losses to the EU and national budgets exceeding €25 million. The suspects allegedly used self-money laundering - a form of money laundering where the same person perpetuates both the primary offense and the money laundering offense.

Consequences

It is believed that a portion of the allegedly fraudulent proceeds was first transferred to an additional company, which then transferred the money to the suspects’ bank accounts abroad. As a result:

• Five of the 11 suspects will face 12-month bans from holding managerial positions in companies and other entities.
• The remaining six will be placed under house arrest.

Important Note

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

About EPPO

The European Public Prosecutor’s Office (EPPO) is an independent public prosecution office responsible for investigating, prosecuting, and bringing to judgment crimes against the financial interests of the EU.