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Italy: EPPO cracks down on multimillion fraud involving EU funds

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(Luxembourg, 24 May 2024) – At the request of the European Public Prosecutor’s Office (EPPO) in Palermo (Italy), a freezing order of over €15 million, issued by the judge for preliminary investigations of the Court of Palermo, was executed today against seven individuals and five companies, suspected of fraud involving EU funds, self-money laundering and tax evasion. 

The judge also ordered restrictive measures against the seven suspects, which prohibits them to apply for subsidies, to enter into contracts with public administration, and to engage in certain professional or entrepreneurial activities. In addition to seizing money, real estate, and company shares, the Italian Financial Police (Guardia di Finanza) of Palermo also seized a well-known campervan adorned with political messages and two coffins on top, which had been parked next to a historic landmark in Palermo for over a year and belonged to the suspects.

It is alleged that the suspects falsified documentation, including formal declarations, technical reports, and photographic reports, to unlawfully obtain over €4.5 million from the European Regional Development Fund (ERDF) to build a fuel distribution system, a farm with stables, and a vineyard with an enclosed cellar. Of the requested figure, over €2.2 million has already been paid out.

According to the investigation, the suspects also issued and used invoices for non-existent operations amounting to €8.3 million, allowing the suspects to receive over €3.4 million in VAT reimbursements. 

In addition, evidence was uncovered of self-money laundering – which involves the same individuals committing both the primary fraud and the subsequent laundering of the illicit proceeds. It is believed that over €1.1 million of the fraudulent proceeds were used to purchase real estate from bankruptcy proceedings and for speculative investments, aiming to obscure the criminal origins of the money. Another €850 000 in criminal proceeds is also alleged to have been misappropriated. 

To prevent the five companies under investigation from continuing their economic activities, the judge ordered that they be seized, and appointed a judicial administrator to oversee them. In total, the companies are valued at €7.5 million.

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) is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.