Cops said the organized crime group used “advanced technologies” including AI to produce false documents for laundering cash.
Police also raided homes and businesses seizing and freezing assets including apartments and villas, cryptocurrency, Rolex watches, gold and jewelry, as well as a Lamborghini, a Porsche and an Audi Q8. |
APRIL 4, 2024
BY HANNAH ROBERTS AND ELISA BRAUN
ROME — Police on Thursday arrested more than 20 suspects in Italy, Austria, Romania and Slovakia as part of a major investigation into massive fraud linked to the EU’s post-pandemic recovery fund.
At the request of EU prosecutors, 150 officers from fraud and financial police units detained eight people, while another 14 were placed under house arrest following a cross-border probe into an alleged criminal organization suspected of defrauding €600 million from the EU’s Recovery and Resilience Facility (RRF) for Italy.
Police also raided homes and businesses seizing and freezing assets including apartments and villas, cryptocurrency, Rolex watches, gold and jewelry, as well as a Lamborghini, a Porsche and an Audi Q8.
Italy is the largest beneficiary of the EU’s post-Covid economic recovery fund, with €191.5 billion in grants and loans to manage and spend. Prime Minister Giorgia Meloni's government is under pressure to meet the fund's spending and project completion deadlines.
Police said the alleged fraud was carried out by a criminal association including professionals with experience in applying for public funding, who helped secure cash for projects worth tens of millions of euros that were meant to improve competitiveness and digitalization in Italian companies.
Financial police reconstructed suspicious transactions and identified “the laundering of huge illicit profits carried out through a complex network of fictitious companies cleverly set up in Italy, Austria, Slovakia and Romania,” Italy's financial police said in a statement.
The group used a “refined money-laundering apparatus … using advanced technologies such as cloud servers located in uncooperative countries, cryptoassets, and artificial intelligence to produce false documents."
Over the past decade crime syndicates have become increasingly adept at siphoning off funds distributed by the EU for development and reconstruction. Criminal organizations have diversified from traditional income streams such as racketeering and robbery, in favor of pocketing EU subsidies that provide a more lucrative and reliable income stream.
Thursday's operations are taking place across Europe with the involvement of police forces in Slovakia, Romania and Austria, and the European Public Prosecutor's Office (EPPO).
The number of fraud investigations related to the EU’s recovery fund soared in 2023, wrote the EPPO — which is responsible for investigating and prosecuting crimes against the bloc’s financial interests — in its annual report.
More than 200 fraud investigations were opened last year related to the EU-wide RRF cash pot, which is worth more €800 billion. In 2022, when the disbursement of the cash was in its early phases, just 15 probes were started. Recovery fund-related probes now represent around 15 percent of all fraud investigations handled by the EPPO.
Italy is under particular surveillance by prosecutors for its management of the recovery fund, with 179 open investigations into its use of the cash.
Fraudsters from across the bloc are setting up fictitious companies or bribing public officials in almost a quarter of all cases on its radar, the bloc’s prosecutors said in the report.
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