Organised crime infiltrates CAP, EUR 20 million fraud uncovered in Italy

Brussels – Fraud of around EUR 20 million at the expense of the Common Agricultural Policy Fund (CAP) linked to organized crime. In Italy, law enforcement agencies, at the request of the European Public Prosecution Office (EPPO), have dismantled a criminal network capable of devising a scheme to obtain illicit European subsidies. Undue subsidies from the European Agricultural Guarantee Fund (EAGF) were allegedly obtained between 2017 and 2022, circumventing the limits imposed by the Common Agricultural Policy, which sets the maximum annual limit for each applicant at EUR 500,000, through the distribution of the corporate assets of an agricultural company based in the province of Padua to 12 other shell companies located in Abruzzo, Veneto, Lazio, Marche, and Umbria.

Against fraud targeting the European Union budget, the Judge for Preliminary Investigations at the Court of Padua issued a freezing order of €17.2 million. He also ordered the seizure of 8,590 basic payment entitlements under the CAP, with a value of 4 million euros (the basic payment entitlement represents the income-based contribution provided for within the framework of the CAP direct payments. It was replaced by basic income support for sustainability). The Guardia di Finanza (tax police) then seized plots of land, apartments,  and villas, and froze bank accounts.

The investigations also uncovered fraud against the state budget, in addition to fraud against the EU budget. Organized crime allegedly set up “a fraudulent scheme aimed at circumventing the national ban on grazing carried out by third parties”, the European Public Prosecutor’s Office said. The ban was introduced in 2015, aiming to ensure that only those directly involved in agricultural work could access public subsidies. Based on the evidence, “several farmers from Northern Italy entered into agreements with the organisers of the scheme, to formally obtain land, livestock and stables,” thus creating the appearance of legitimate farming operations, needed to apply for EU agricultural subsidies. The agricultural entrepreneurs at the centre of this scheme were reported to the Regional Prosecutor’s Office of the Veneto Court of Auditors for financial damage to the national state amounting to €32.1 million, resulting from their fraudulent conduct.