Italian Authorities Uncover €1.7 Billion Tax Fraud and Money Laundering Scheme Involving Chinese Shadow Banks

Italian authorities announced on Thursday that they had uncovered a tax fraud scheme involving 85 suspects, with 1.7 billion euros ($1.9 billion) in false invoices. The money from the fraud was allegedly laundered through a system of "Chinese shadow banks." Ancona's Guardia di Finanza (GdF) police revealed that assets worth 350 million euros, including cash, luxury cars, and real estate, were seized as part of the investigation.

The operation also saw the freezing of 1,569 bank accounts and the sequestering of 140 companies suspected of issuing false invoices. Searches were conducted in various locations, including Milan, Lombardy, Florence, Padova, and Sicily. The investigation, involving 85 suspects, revealed that 64 of them are Chinese nationals. Ongoing efforts aim to identify Italian customers who may have utilized the service to launder money.

Italian authorities have been focusing on the emergence of an underground banking system operated by unlicensed Chinese money brokers. Over the past year, various investigations across Italy have pointed to the existence of a broader range of services offered by Chinese-linked organizations, including facilitating cross-border payments for drug cartels and aiding tax evasion.

The Guardia di Finanza stated that prosecutors in Ancona found fictitious "paper" companies issuing false invoices and directing customers to specific Italian bank accounts for payments. Once the funds were received, the fraudulent company would transfer an equivalent amount to a Chinese bank account, justifying it as payment for non-existent product imports. The original sum, minus a commission, was then reportedly returned in cash by couriers to the initial paying customer.

The use of this "underground bank" network, according to the GdF, enabled the laundering of billions of euros. The investigation sheds light on the challenges posed by illicit financial activities and the global nature of money laundering schemes, prompting authorities to collaborate on efforts to combat such complex criminal enterprises.

By fLEXI tEAM