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Italian authorities and their European counterparts have arrested 43 people and seized assets worth 520 million euros, including luxury cars and boats, in a bid to tackle an alleged tax fraud scheme by Italian mafia groups.
The European Public Prosecutor’s Office, which led the investigation, said members of several Italian criminal groups came together to carry out a complex and “highly profitable tax evasion scheme”. The scheme, dubbed a “VAT carousel fraud”, involved invoices worth €1.3 billion worth of laptops, earbuds and other electronic goods.
The alleged fraud involved the creation of fake companies – or ‘missing traders’ or ‘ghost companies’ – in Italy, other EU countries and other countries outside the EU, which would buy and sell goods between themselves and then disappear without meeting their tax obligations . .
The network provided a paper trail for fraudulent VAT refund claims from the Italian authorities.
The assets frozen on Thursday, to compensate the EU and Italian authorities for money lost due to the unjustified VAT refunds, include 129 bank accounts, almost 200 apartments, houses and other real estate, and 44 luxury cars and boats, the EPPO said.
Participants in the scheme included members of the Naples-based Camorra and Sicily’s Cosa Nostra, who invested as a means to launder money from other criminal activities, Italian authorities said.
“Mafia methods” were used to “resolve conflicts that arose within the criminal syndicate between the members of the different criminal organizations,” the EPPO said in a statement.
Of those arrested Thursday, 34 have been sent to jail awaiting trial, while nine are under house arrest, authorities said. In addition to the 43 people detained in Italy, seven European arrest warrants were issued against suspects in Bulgaria, the Czech Republic, the Netherlands, Spain and non-EU countries.
In total, police in ten EU countries carried out searches at around 160 locations on Thursday, looking for more evidence of the scheme, which reportedly involved at least 195 people and around 400 companies.
Laura Kövesi, Europe’s chief prosecutor, said the case was a “defining investigation” for the EPPO, which is increasingly concerned about the penetration of Italy’s sophisticated organized crime groups in financial fraud across Europe.
“It’s been a while since we started sounding the alarm about the heavy involvement of dangerous organized crime groups in fraud [against] the EU budget,” she said, citing the “colossal damage” and “the threat to our internal security” caused by such activities.
“We are now shedding light on a first such major case,” Kövesi said.
Italian Prime Minister Giorgia Meloni praised the arrests and asset seizures, which she said “demonstrated the government’s firm commitment to fighting tax evasion, one of our top priorities.”
Thursday’s crackdown comes seven months after Italian authorities seized assets worth 600 million euros – including villas, luxury cars, watches and jewelry – and arrested 22 people in connection with alleged fraud on the post-pandemic recovery fund of 800 billion euros from the EU.
Of the suspects in that case, two have already admitted to wrongdoing through a plea agreement, while trials for the rest began this week.