Police in Italy and other European countries, including Romania, have arrested 22 people and seized assets worth more than 600 million euros in a huge corruption case related to the fraudulent use of EU post-pandemic recovery funds, Politico reports.
Italian police seized apartments, villas, cars and luxury watches and jewelry worth more than 600 million euros. More than 100 suspicious financial transactions were investigated. Among the confiscated goods and frozen assets are also cryptocurrencies, Rolex watches, gold, as well as a Lamborghini, a Porsche and an Audi Q8.
The alleged fraud raises questions again about the misuse of €800 billion of funds that the EU has allocated for the Recovery and Resilience Mechanism (RMR).
Italy is the country that has benefited from the most funds, having been allocated almost 200 billion euros in the form of grants and loans.
The European Public Prosecutor’s Office (EPPO) reported that a multinational criminal association accessed 600 million euros in subsidies between 2021 and 2023, forming a network of shell companies and claiming that the funds were used for their international expansion, according to the Financial Times.
The funds were given to the shell companies by Simest, an Italian government institution that was meant to help small businesses grow. Of the 22 people arrested, 8 were detained, and 14 were placed under house arrest.
The EPPO and Italian authorities said the scheme was based on an elaborate network of “ghost” companies that also extended to Slovakia, Romania and Austria.
These companies were generating fake balance sheets using offshore cloud servers, crypto assets and artificial intelligence to “hide and protect” their activities.
“The suspects transferred their funds to their bank accounts in Austria, Romania and Slovakia as soon as they received the advance payments,” the EPPO said, adding that in almost a quarter of the cases it investigates across the bloc, criminals set up companies fictitious or bribe public officials.
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