Malta involved in Italian fuel tax fraud investigation worth €1 billion

Dozens of people have been arrested and almost €600 million in assets seized following an investigation into fuel tax fraud by the Italian authorities, in which Malta was also involved, according to European Union Agency for Criminal Justice Cooperation (EUROJUST).

The large-scale operation was coordinated by EUROJUST at the request of the Italian authorities and led to the arrest of 23 suspects in Italy, as well as the freezing of assets thanks to the implementation of a new legal framework at the European level.

EUROJUST enabled the freezing of bank accounts in Bulgaria, Croatia, Germany, Hungary, Malta and Romania. Where possible, it also ensured the confiscation of companies’ assets or the administrative closure of enterprises that were used for the fraud scheme.

On 8 April, more than 1,000 officers of the Italian Guardia di Finanza, Carabinieri and military staff were deployed to take precautionary measures against two mafia groups from Naples and the Reggio Calabria.

Investigations into the fraud started in 2017 by the Public Prosecutor’s Office in Calabria and uncovered how a number of different mafia groups came together to illegally import and market fuel products while laundering proceeds via front men and shell companies. For this purpose, they set up enterprises and opened bank accounts in six countries, including Malta.

By fraudulently mislabeling imports or transports of petroleum products, the suspects were able to avoid paying an estimated EUR 946.5 million in taxes in Italy, while a series of paper companies issuing fake payments for nonexistent supplies allowed the groups to launder money from their illegal activities. The final proceeds of these criminal activities were partially transferred to foreign bank accounts.

The operation applied the EU Regulation on Freezing and Confiscation Orders (EU 1805/2018). The Regulation, which came into force in December 2020, aims to make the freezing and confiscation of criminal assets across the EU quicker and simpler. It includes features such as time limits for the recognition and execution of the freezing and confiscation orders respectively, and standardized forms, which are designed to ensure that EU states act faster and communicate more efficiently.

Eurojust also coordinated the cross-border judicial investigations and supported the authorities in Bulgaria, Croatia, Germany, Hungary, Malta and Romania to freeze accounts, seize assets and assist with the administrative closure of the false enterprises that had been set up. Malta assisted the operation through the Asset Recovery Bureau.