Police have made a significant breakthrough in uncovering a massive fraud scheme linked to the European Union's post-pandemic recovery fund. A total of 22 individuals have been arrested, and assets exceeding €600 million ($650 million) have been seized in connection with the alleged fraud.
Following an investigation by the EU prosecutor, eight individuals were detained, while 14 others were placed under house arrest. Additionally, two individuals have been prohibited from practicing their profession. The arrests were carried out in Italy, Austria, Romania, and Slovakia.
The Italian financial police reported seizing a range of high-value items, including Lamborghinis, Porsches, Rolexes, Cartier jewelry, cryptocurrencies, luxury villas, and more during raids on homes and offices.
The alleged fraud has raised concerns about the misuse of the EU's €800-billion recovery fund, with Italy being the largest beneficiary, receiving grants exceeding €194 billion.
The European Public Prosecutor's Office (EPPO) revealed that a criminal organization is suspected of orchestrating a fraud scheme between 2021 and 2023 to deceive Italy's recovery packages. The group allegedly applied for non-repayable grants in 2021 under the guise of supporting small- and medium-sized companies. However, they later falsified balance sheets to make it appear that the companies were active and profitable, when in reality, they were non-existent.
After obtaining approximately €600 million from the Italian National Recovery and Resilience Plan (NRRP), the group transferred the funds to bank accounts in Austria, Romania, and Slovakia. The EPPO disclosed that the group utilized cryptocurrencies, artificial intelligence, and offshore cloud servers to perpetrate and conceal the fraud.
Notably, the United States has also been vigilant in combating alleged fraud related to Covid-19 relief resources. A federal watchdog cautioned in June about the potential distribution of over $200 billion in fraudulent post-pandemic funds by the Small Business Administration.
