Prosecutors say the syndicate has set up 29 front companies in Italy and circumvented taxes by closing them within two years.
The European Prosecutor’s Office in Rome is investigating euro customs and value-added tax (VAT) fraud schemes for millions of people who have been arrested for illegal imports of clothing, shoes and accessories from China, with 13 Chinese citizens and four Italians arrested.
The syndicate entered the country with imported handbags, shoes and other accessories and misused European Union customs procedures.
According to the European Prosecutor’s Office (EPPO), the contraband entered the European Union through Bulgaria, Hungary and Greece before being transported to distribution centres in Italy.
The prosecutor’s office revealed that the syndicate had generated fake invoices for nonexistent transactions “between fictitious operators.”
To avoid taxes, the Syndicate is said to have established 29 companies in Italian provinces, Florence, Prato and Rome, before closing within two years.
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Calling the syndicate “Chinese entrepreneurial criminal enterprises,” EPPO noted that they also ran underground financial transfer operations, avoiding traditional financial intermediaries and serving other Chinese citizens living in Italy for a fee.
The latest prosecutor continues his arrest in another case last year. This has discovered money laundering work that could allow EU law enforcement officials to process 1 million euros a day.
Authorities confiscated 160,000 euros ($173,786) in cash and arrested Kingpin along with four other suspects.
French customs were also involved in the investigation. The customs began three years ago when police in the country discovered 500,000 euros ($543,082) hidden in a car in southern France.
It was established that money laundered in the business was generated by counterfeit goods, prostitution, taxes and customs fraud.
EU authorities have frozen 116 million euros ($126 million) with a tax evasion scheme of 113 million euros ($137 million) after 20 locations in Italy in Marche, Emilia Romana, Puglia, Beneto, Tuscany, Lombardy, Able, Campania, Piedmont and Lazio.
“Based on the evidence, illegal profits were washed using a Chinese underground bank network with secret branches of Marche (central Italy),” Eppo’s statement said.
Five Chinese restaurants, eight luxury cars, homes, apartments and shopping centres associated with 33 individuals have been seized and bank accounts have been frozen.
The EPPO reported that five suspects were placed on house arrest, wearing electronic bracelets, two people were jailed, and two others were told to report to police on a daily basis. All of them had to do with money laundering.
The European Office said the scheme is part of an underground banking network that has moved funds around Europe through Bulgaria, Denmark, Denmark, Estonia, France, Ireland, Germany, Greece, Spain and the UK.
Authorities estimated that the funds generated by the racket amounted to 500 million euros, and revenues from “complex schemes of international tax fraud” that include “missing traders.”
The EPPO cited hundreds of clothing and accessories that entered Europe through Bulgaria and Greece before being redistributed in Italy, as in this year’s survey.
