European authorities have dismantled a criminal gang suspected of evading 113 million euros ($122.3 million) tax money while using a Chinese underground banking network.
On Oct. 25, the European Public Prosecutor’s Office (EPPO) in Bologna and Milan, Italy, executed a freezing order of 116 million euros ($125.53 million) against 33 suspects. Five Chinese restaurants, eight high-end cars, and one shopping center were seized, as well as a house and an apartment belonging to the suspects. Several bank accounts were frozen.
According to the EPPO, an independent public prosecution office of the European Union, searches were carried out in 20 cities in Italy on the day. The EPPO is responsible for investigating, prosecuting, and bringing to judgment crimes against the EU’s financial interests.
The officers arrested seven suspects, including two alleged ringleaders, placed five suspects under house arrest with electronic bracelets, and mandated two other suspects to report regularly to the police. All of them are suspected of VAT (value-added tax) fraud, criminal association, and money laundering.
“The investigation identified a complex scheme of international tax fraud, carried out through numerous ghost companies (‘missing traders’), which imported hundreds of containers of clothing and accessories from China to Italy, using triangulations with Bulgaria and Greece, to hide the origin of the goods,” reads a statement by the EPPO.
“It is understood that the criminal scheme had a turnover of at least €500 million ($541.07 million), while evading the payment of VAT and custom duties.”
Profits Laundered
Based on current evidence, illicit profits were laundered through a Chinese underground banking network with clandestine branches in Marche, central Italy. The overseas transfer of illicit funds was conducted via shell companies and false invoices, which helped circumvent anti-money laundering measures.
“The money passed through many European countries, including Bulgaria, Denmark, Estonia, France, Ireland, Germany, Greece, Spain, and the UK, before arriving to China,” the prosecution office stated. “The evidence shows that some of the money returned via banking to Italy, where the organisation invested it in legitimate commercial businesses.”
The searches, conducted by the Italian police and supported by Bulgaria, Germany, and Greece authorities, also seized extensive documentation.
The crackdown is one of recent European efforts to dismantle criminal organizations involving Chinese nationals in the EU.
On May 24, Europol, the European Union police agency supported the Spanish police in breaking up two criminal organizations that smuggled over 1,000 Chinese nationals using various fraudulent methods.
On July 2 and 3, coordinated European law enforcement efforts dismantled an international money laundering network in Spain, arrested five Chinese nationals, and seized nearly 160,000 euros ($173,319) in cash.
