Italian authorities uncover multi-million euro fraud, seize 100 million in assets

Targeting an organized crime group accused of large-scale VAT fraud, Italian authorities arrested on Tuesday 13 suspects and seized up to 100 million euros ($108.17 million) in assets, the European Public Prosecutor’s Office (EPPO) in Turin said.

The Italian Financial Police carried out the operation after an EPPO-led investigation uncovered a complex criminal network with international ties based in the Campania region. The group is suspected of evading around 100 million euros in VAT through fraudulent trade in plastic products between 2018 and 2023.

EPPO said the suspects created and used fraudulent invoices for fake transactions totaling 500 million euros ($541 million). The scheme involved a network of shell companies acting as intermediaries in the sale of industrial plastic products. These companies, which often had no real business activity, failed to report and pay VAT.

By inserting multiple fictitious entities into the supply chain, the suspects obscured the real flow of goods and finances, making it difficult to trace the ultimate beneficiaries. This arrangement enabled the suspects to sell products at below-market prices, undercutting competition and hurting legitimate businesses in the industry. The goods were ultimately supplied to companies in Piedmont, Lombardy, and Tuscany, where they were used in industrial production.

An Italian court issued precautionary measures against the 13 suspects. Six were placed in pretrial detention, while seven were put under house arrest. Authorities also froze financial assets and other property tied to 15 individuals and 13 companies.

Authorities are investigating 52 individuals for alleged offenses, including involvement in a criminal organization, VAT fraud, issuing and using false invoices, failing to file tax declarations, tax evasion, and unlawful tax compensation.

EPPO said the investigation is ongoing as authorities work to identify additional links in the network and seize more assets to recover the illicit proceeds.