Italian police reported on Thursday that they had uncovered a tax fraud committed by 85 suspects involving 1.7 billion euros ($1.9 billion) worth of fake accounts. The money was laundered through a system of so-called Chinese shadow banks, according to Reuters.
Guardia di Finanza (GdF) police in Ancona, Italy’s port city, claimed to have seized assets worth 350 million euros, including cash, luxury cars, and property.
They also blocked 1,569 bank accounts, ordered the seizure of 140 companies allegedly issuing fake bills, and searched properties in Milan, the Lombardy region, Florence, Padua, and Sicily.
According to the report, 64 of the 85 suspects were Chinese nationals, with the investigation ongoing to identify Italian clientele who used the service to launder money.
Over the previous year, Italian police had been investigating a kind of parallel underground banking system operated by unlicensed Chinese financial brokers. The investigations, carried out in various parts of Italy, have led authorities to suggest the existence of a wider range of services offered by Chinese-linked organisations, including the concealment of cross-border payments for drug cartels and the facilitation of tax evasion.
GdF stated that the Ancona prosecutor’s office discovered that fictitious “paper” companies were issuing false invoices and telling customers which Italian bank account to transfer payments to.
Once the money was received, the fictitious company would transfer the same amount to a Chinese bank account, justifying it as payment for imports of non-existent products.
According to the police report, the original amount, less the commission, was returned in cash to the buyer who made the first payment, by couriers. The use of the “underground bank” network makes it possible to launder billions of euros, the GdF claimed.
