EPPO: 17.7 million fraud in Italy. Empty shells to evade VAT

Brussels – The European Public Prosecutor’s Office (EPPO) in Rome discovered a €7.7 million VAT fraud on the sale of electronic devices. These products were placed on the Italian market at discounted prices thanks to a fraudulent mechanism capable of evading payment of the tax. The Rome office of the European body ordered the Finance Police of Bolzano to carry out preventive searches and seizures in Rome and Brescia. 

Lasting two years and coordinated by the EPPO,  the investigation  was conducted by the Economic and Financial Police Unit of the Finance Police in Bolzano, as the South Tyrolean city was the final destination of the fraudulent goods. The operational base of the alleged perpetrators, however, was in Rome. According to the daily newspaper of the province of Bolzano, Alto Adige, “all Bolzano entrepreneurs involved in the distribution of the goods were unaware of the illegal mechanism.” 

Precautionary measures were ordered for four people, the public prosecutor’s office reported. The person considered to be the “de facto” manager of several illegal companies has been placed under house arrest in Rome, while the other three have been banned from carrying out their business activities. The accusation is that of fraud against the European Union, carried out through a mechanism of intermediary companies, which are essentially “empty shells.” 

All subjects under investigation bought electronic devices from EU suppliers and resold them to Italian retailers at very low prices. This would have been possible thanks to the issuance of false invoices since 2017. The goods, before being sold to the final distributor, passed through ghost companies that accumulated the tax debt (VAT debt) without ever paying it. In this way, smartphones and laptops were offered to retailers at very low prices, giving them an unfair competitive advantage. 

The Finance Police confiscated bank accounts, credit cards, cash, vehicles, motorbikes and three Rolex watches. A total of seven searches were conducted to recover the proceeds of the scam and gather evidence of financial flows.