CHINA: Italy police bust 70-mn-euro China tax dodge scheme

The freeze followed an investigation into a large-scale customs and tax fraud scheme led by EPPO

The suspects “are under investigation for participating in a criminal organization committing multiple tax offenses “

ROME: Italy’s financial police on Thursday froze over 70 million euros worth of assets in a sting targeting 17 people suspected of dodging tax on imports from China, including clothing.

The freeze followed an investigation into a large-scale customs and tax fraud scheme led by the European Public Prosecutor’s Office (EPPO) in Rome and code-named “Dragone” (“Big Dragon“).

Police in Rome and Florence executed a freezing order of 71.05 million euros ($76.76 million) targeting “17 suspects, four Italians and 13 of Chinese origin,” said an Italian police statement.

The suspects “are under investigation for participating in a criminal organization committing multiple tax offenses related to the import of goods, such as clothing, footwear, bags and various accessories,” said an EPPO statement.

Investigators allege that “a criminal enterprise of Chinese entrepreneurs created a network of 29 companies operating in the provinces of Florence, Prato and Rome, to evade customs duties and VAT,” or value-added tax, it said.

The Chinese goods were cleared through customs in Bulgaria, Hungary and Greece and then transported to logistical hubs in Italy.
They were then moved multiple times “between fictitious operators, accompanied by invoices for non-existent transactions,” EPPO said.
“To avoid detection, the companies involved only existed for around two years before being replaced by new ones to allow the fraudulent scheme to continue,” it added.