A criminal court in the northern Italian city of Turin has sentenced several individuals to prison and ordered the seizure of millions of euros worth of assets as part of a major trans-national tobacco contraband case that has involved law enforcement officials for years after first being uncovered by the European Anti Fraud Office (OLAF) more than half a decade ago.
Europe’s anti-fraud investigators, better known by their French acronym OLAF, found that an international network of fictitious companies carried out illegal exports from the EU to destinations outside the bloc, while at the same time legally importing tobacco products from third countries which were then put into circulation in the EU without having to pay customs duties and taxes.
According to the EU anti-fraud office, the scheme was operated by an extensive network with connections to organised crime in several of the EU Member States and third countries. The case included corrupt customs officials who sometimes validated exports without the containers actually leaving the EU, or validated exports through trucks that had already been impounded.
OLAF provided evidence and led coordination activities to support national law enforcers at each key step of their investigations across Europe.
OLAF and law enforcement agencies in Italy and Germany found that the same network produced “made in Italy” cigarettes at a plant near Turin for distribution on the EU’s black market. The plant’s materials and assets were seized and its staff have been arrested.
The court in Turin ordered the defendants to pay over € 119 million euros to Italian Customs and €36 million to the Italian Tax Office. No compensation will go to other EU Member State’s customs offices, despite millions of euros in border taxes having been lost because of the group’s activities.
OLAF’s Acting Director-General, Nick Ilett, said “this ruling shows the excellent results that can be achieved when OLAF works alongside our national partners in a coordinated action against criminals who deplete the public coffers of substantial revenue. It is only through this type of on-the-ground, joint work that we can protect our taxpayers’ money, untangle complex cross-border fraud schemes, and ensure that the criminals are brought to justice.”