Recently, the European Public Prosecutor’s Office (EPPO) carried out a joint operation with local police in Bologna and Milan, Italy, and successfully dismantled a Chinese underground money laundering criminal organization. This syndicate was suspected of evading 1.13 billion euros (approximately 1.2 billion US dollars) in taxes and using a network of Chinese underground banks to launder money.
According to a statement released by EPPO, 7 suspects were arrested, including two who were believed to be the masterminds of the criminal group and have been detained, while the other five suspects were placed under house arrest with electronic ankle monitors. Additionally, two suspects are required to report to the authorities regularly. All these suspects are allegedly involved in tax fraud, money laundering, and organized crime.
The search operation conducted last Friday (October 25) in Ancona, Italy, was led by the Guardia di Finanza, the Italian financial police, with collaboration from other financial police units in Italy, as well as support from the Bulgarian National Revenue Agency, German authorities, and the Financial and Economic Crime Unit of Greece.
During the search, a large number of documents were seized. Additionally, freeze orders totaling 116 million euros were placed on assets belonging to 33 suspects. Authorities also sealed off five Chinese restaurants, a shopping center, a house, and an apartment, all owned by the suspects. Furthermore, eight luxury cars were seized, and multiple bank accounts were frozen.
The investigation uncovered a complex international tax fraud scheme that operated through multiple shell companies, importing hundreds of containers of clothing and accessories from China to Italy, concealing the origins of the goods through triangular trades involving Bulgaria and Greece.
The statement revealed that the turnover from this criminal scheme was estimated to be at least 500 million euros, evading payments of value-added tax and customs duties.
According to evidence, the illegal profits were laundered through a network of Chinese underground banks, with a secret branch located in the Marche region of central Italy.
Illegally obtained funds were transferred overseas through shell companies and fake invoices to circumvent anti-money laundering measures. These funds passed through multiple European countries, including Bulgaria, Denmark, Estonia, France, Ireland, Germany, Greece, Spain, and the UK, before reaching China.
Evidence indicated that a portion of the funds flowed back to Italy through banks and were invested by the organization in legitimate commercial activities.
Based on the principle of “innocent until proven guilty,” all individuals involved are considered innocent until proven otherwise in an Italian court of law.
EPPO is an independent prosecution body of the European Union, responsible for investigating, prosecuting, and adjudicating crimes that harm the financial interests of the EU.
The presence of Chinese money laundering organizations has become a serious concern for law enforcement agencies in Europe.
Europol, the European Union’s law enforcement agency, has stated that Chinese underground bank networks are increasingly involved in money laundering activities in Europe, including proceeds from drug trafficking. However, in response to these claims, the Chinese Ministry of Foreign Affairs stated in January that they were “unaware of the situation.”
To monitor underground bank networks, the Italian financial police established a “special team” last year. Furthermore, the Italian government has called for an investigation into the “infiltration of Chinese (CCP agents) into Italian society.”