EU fund fraud case of over $20b, Italy arrests 22, recovers millions.

As part of an investigation into alleged fraud connected to European Union and Italian funding schemes, Italian police announced on Thursday that they had detained 22 individuals and seized properties worth over 600 million euros ($652 million), ranging from villas to Rolexes. 

The organization, according to Venice’s finance police, worked throughout Europe and allegedly tried to cheat the EU’s COVID pandemic recovery fund as well as substantial home improvement programmes that Italy had instituted.

Along with luxurious vehicles including a Lamborghini and a Porsche, police claimed to have seized flats, villas, gold, cryptocurrency, Rolex watches, Cartier jewelry, and about 600 million euros in fraudulent tax credits for home renovations. 

According to authorities, searches were also conducted in Romania, while three persons were detained in Slovakia, two in Austria, and seventeen throughout Italy. 

Fears that fraudsters are benefiting from both Italy’s building projects and the EU’s Recovery and Resilience Facility (RRF) may increase as a result of the enquiry.

Nearly 102 billion euros have been given to Italy from the EU’s COVID recovery funds thus far, and by 2026, over 90 billion more are anticipated.

Concurrently, the government is disbursing billions for the construction initiatives, such as one that promised to reimburse homeowners for 110% of the cost of energy-efficient renovations and another that would cover up to 90% of the cost of facade work. 

The unidentified suspects, according to the police, had created “sophisticated fraud systems” that involved presenting phony projects through a number of front firms in order to obtain tradable tax credits from the state.

Following the completion of the fraud, the group established a mechanism for money laundering that made use of cryptoassets and cloud servers situated in non-cooperative nations.

The European Public Prosecutor’s Office (EPPO), which is in charge of looking into and prosecuting crimes against the bloc’s financial interests, was reportedly involved with the Italian police. 

According to EPPO’s yearly report, which was released in February, there were 1,927 ongoing investigations in 2023, involving a total of 19.2 billion euros in alleged fraud. In Italy alone, about 618 investigations were launched.