Italy: Two suspects arrested and €5 million seized in investigation into fraud involving SME funds

Luxembourg: At the request of the European Public Prosecutor’s Office (EPPO) in Rome (Italy), two suspects were arrested yesterday and freezing orders of up to €5 million were carried out, in an investigation involving multiple Italian companies suspected of fraudulent use of EU and national funds destined to finance small and medium companies (SMEs).

The arrests and freezing orders, issued by the judge for preliminary investigations of the Court of Milan, were executed by the Italian Financial Police (Guardia di Finanza – Nucleo Speciale di Polizia Valutaria). Searches were carried out in the cities of Cremona, Lecce, Milan, Rome and Rimini. Ten people and seven companies are under investigation, also supported by judicial police officers working at the EPPO office in Rome.

Based on the evidence, between June 2021 and October 2024, the companies under investigation fraudulently received approximately €5 million from the European Guarantee Fund (EGF), after providing documents that contained false information about the companies and individuals involved. The funds were paid by Italian public bank Medio Credito Centrale, which manages public guarantee schemes, including the SME Guarantee Fund. The suspects then used the funds for purposes other than those they were meant for. According to the investigation, at least €1.4 million was transferred to bank accounts under the control of the suspects in several EU Member States, including Belgium and Lithuania, in order to launder the money.

Some of the suspects under investigation were already linked to other EPPO cases of VAT carousel fraud and NextGenerationEU fund fraud involving organised crime.

All persons concerned are presumed innocent until proven guilty in the competent Italian courts of law.

The European Public Prosecutor’s Office (EPPO) is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting, and bringing to judgment crimes against the financial interests of the EU.