The European Public Prosecutor's Office states that the country's financial police, Guardia di Finanza, froze over 71 million euros in bank accounts last week.
The syndicate imported handbags, shoes, and other accessories, making use of European Union customs arrangement 42. This arrangement exempts the payment of import VAT at European ports of entry when the final destination of the goods is another EU country.
According to the European Public Prosecutor's Office (EPPO), the smuggled goods entered the European Union through Bulgaria, Hungary, and Greece and were then transported to distribution centers in Italy.
The Public Prosecutor revealed that the syndicate prepared and submitted false invoices for non-existent transactions “between fictitious operators.”
To evade taxes, the syndicate allegedly established 29 companies, all of which were closed within two years.
The EPPO described the syndicate as a ‘criminal enterprise of Chinese entrepreneurs’ and noted that they also operated an underground money transfer service, bypassing traditional financial institutions and offering the service for a fee to other Chinese nationals living in Italy.
Five Chinese restaurants, eight luxury vehicles, a house, an apartment, and a shopping center belonging to a total of 33 individuals were seized. Their bank accounts were also frozen.
The European office noted that the scheme was part of an underground banking network that moved money across Europe via Bulgaria, Denmark, Estonia, France, Ireland, Germany, Greece, Spain, and the United Kingdom before finally reaching its destination: China.
Authorities estimate that the money generated by the fraud amounted to 500 million euros and was the result of a “complex scheme of international tax fraud” involving “carousel traders.”
The EPPO cited hundreds of containers with clothing and accessories that, as this year’s investigation showed, entered Europe via Bulgaria and Greece and were then redistributed in Italy.