Italian financial police announced on Thursday that they have arrested 22 individuals and seized assets valued at over 600 million Euros (USD 650 million) in connection with an alleged post-pandemic recovery fund fraud case tied to European Union and Italian funding schemes.
Finance police in Venice said they believe the group, which operated in various European countries, sought to defraud the European Union’s COVID pandemic recovery fund and generous home improvement schemes introduced by Italy.
Police said they seized flats, villas, Rolex watches, Cartier jewelery, gold, cryptocurrencies and luxury cars such as a Lamborgini and a Porsche, in addition to some 600 million euros worth of illegitimate tax credits for home improvements.
Three people were arrested in Slovakia, two in Austria and 17 across Italy, police said, with searches also carried out in Romania.
The investigation will heighten fears that both the EU’s Recovery and Resilience Facility (RRF) and Italy’s own building schemes are proving a boon for fraudsters.
Italy has so far received almost 102 billion euros from the EU COVID recovery funds, with over 90 billion more expected by 2026.
Simultaneously, the government is paying out billions for the building schemes, including one which offered to pay homeowners 110% of the cost of energy-saving renovations and another which covered up to 90% of the cost of doing up facades.
Police said the suspects, who were not named, had devised “sophisticated fraud systems”, using a series of front companies to present fictitious projects and thereby win tradeable tax credits from the state.
Once the fraud was completed, the organisation set up a money laundering system, including using cloud servers located in non-cooperative countries and cryptoassets.
The Italian police said they had worked with the European Public Prosecutor’s Office (EPPO), which is responsible for investigating and prosecuting crimes against the bloc’s financial interests.
In its annual report published in February, EPPO said that in 2023 it had 1,927 ongoing investigations, which together involved some 19.2 billion euros of suspected fraud.
(Reuters)