In an investigation into a complex VAT fraud on imported fuels, led by the European Public Prosecutor’s Office in Bologna (Italy), the Parma Italian Financial Police (Guardia di Finanza) executed today, 23 March 2023, a freezing order of assets of up to €149 million.
The freezing order was issued by the Parma preliminary investigation judge, at the request of the EPPO, against five individuals and two companies involved in fuel trading.
The judicial decree to seize cash, bank accounts and real estate was executed in Parma, Potenza and Salerno.
During the searches, the Guardia di Finanza discovered millions of euros in cash hidden under the floor in the premises of one of the companies investigated, using ‘cash dogs’ – canine units specialised in searching for currency.
At stake is a suspected Missing Trader Intra-Community (MTIC) fraud – a complex criminal scheme that takes advantage of EU rules on cross-border transactions between its Member States, as these are exempt from value-added tax (VAT).
The investigation concerns a suspected criminal group formed by three individuals, all Italians, working from Dubai, Miami and Salerno. They are suspected of having introduced petroleum products into the Italian territory from other EU Member States for their subsequent resale at a low cost, using a string of shell companies and a buffer company.
The fuel products were eventually sold to a company based in Parma, believed to have committed VAT fraud, which allowed it to resell the petrochemical products in question below market prices, thus obtaining an unlawful advantage over honest economic operators.
According to the investigation, the fuel products were imported via two EU-based companies from refineries in Slovenia and Croatia, using vehicles from a Croatian transport company ‘de facto’ managed by one of the alleged members of the criminal association.
In some cases, a Potenza-based buffer company was used between the Italian missing traders and the storage company based in Parma, which had the sole purpose of introducing an additional fictitious step in the commercial chain, so that the fraud would not be directly linked to the Parma-based company. The buffer company is also suspected of tax fraud.
In the course of this investigation, which was started by the Italian authorities and was evoked by the EPPO in 2022, a search warrant was already executed in June 2019 at the headquarters of the Parma-based company, which led to the seizure of a total of €1.5 million in cash, including around €190 000 in US dollars.
It is estimated that the scheme caused damages to the tax administration of more than €92 million, relating to unpaid tax since 2016.
The crimes under investigation include fraud against the financial administration, the issuing and use of false invoices, forgery and false or omitted declarations on VAT and income tax.
The investigation was carried out by the Parma Comando Provinciale della Guardia di Finanza.