An order to seize assets worth more than €8.5 million from seven companies in the China Wholesale Center of Padua, a distribution hub of goods of East Asian origin, has been executed by the Italian Financial Police (Guardia di Finanza) in an investigation led by the European Public Prosecutor’s Office (EPPO).
The investigation revealed a suspected evasive mechanism around the import, delivery and sale of clothing in Italy from East Asia, put in place by seven companies within the Chinese community to defraud the tax authorities. These enterprises issued invoices relating to non-existent transactions, which were then merged into their respective tax declarations from 2016 to 2020, for a taxable amount of around €39 million. The resulting non-payment of VAT corresponds to the amount that has been ordered to be seized, in financial and real estate assets, as profits of the crime.
The analysis of the documentation seized during searches by Guardia di Finanza officers of Venice and Padua earlier this year, as well as the active and passive invoicing flows by some companies, made it possible to identify many alleged shell or missing trader companies located in Italy (Prato and Milan) and in Czechia, Greece, Hungary, Slovakia, Slovenia and Spain. An additional €500 000 was seized by the EPPO from a separate Chinese businessperson in the same context. Evidence of a huge flow of money abroad suggests that the companies under investigation are functional structures to create liquidity and profit of the tax fraud, which are sent to China.
This investigation was initiated by Guardia di Finanza under the coordination of the Public Prosecutor’s Office of Padua, and was taken over by the EPPO in July 2021.