The European Public Prosecutor's Office (EPPO) confirmed on Tuesday that in a coordinated operation by its offices in Naples, Bologna and Rome, a criminal group was dismantled that allegedly imported fuel onto the Italian market by systematically evading value added tax (VAT).

The operation, codenamed ‘Fuel family’, involved dozens of people, including some of the leaders of this illegal business. At the same time, an order was issued to freeze assets worth around 300 million euros belonging to 59 suspects and 13 companies believed to have been part of a criminal ring.

On Monday, the European Public Prosecutor’s Office in Bologna, Italy, blocked around €2.4 million worth of assets in Romania linked to individuals involved in a complex fuel fraud scheme.

At least ten suspects

The case began to unravel last year when a chain of illegal sales of fuel from refineries in Croatia and Slovenia was discovered in Italy. Once sold, it was fictitiously exported to the UK and Romania and then to Italian companies that existed only on paper.

The EPPO confirmed to N1 Zagreb that a new investigation has been launched with today’s arrests. However, this group also made money illegally by importing fuel from Croatia and Slovenia.

At the centre of the criminal scheme is, as suspected, a criminal organisation consisting of at least ten suspects. Some of them are linked by family ties and are involved in a major VAT fraud in the fuel trade. The group had subsidiaries in Italy and abroad.

Five suspects have been placed under house arrest and three will have to report regularly to the police. They are suspected of VAT fraud, criminal association and money laundering.

Simulated transactions

Investigators currently suspect that the fuel was imported by suppliers from Croatia and Slovenia as well as from other countries via a chain of more than 40 disappearing dealers in Italy. These are companies that only exist on paper and quickly disappear again without fulfilling their tax obligations.

At the head of the chain of bogus traders was a company based in Rovigo, which had a warehouse in Magenta. According to the investigation, most of the fuel was actually delivered to this warehouse and the rest to the dealers.

According to the evidence gathered so far, invoices for simulated transactions totalling over one billion euros were created in this chain of fraud. This resulted in around 260 million euros in unpaid VAT.

The criminal group is also suspected of laundering more than 35 million euros in ill-gotten gains through bank accounts of companies in Hungary and Romania. This money was eventually handed over to the fraudsters in cash after they had systematically withdrawn the funds from the bank.