Luxury cars and watches seized in an alleged $650 million COVID-19 fraud

Italian financial police have announced the arrest of 22 individuals and the seizure of assets exceeding 600 million Euros (USD 650 million) in relation to alleged fraud connected to the European Union’s post-pandemic recovery fund, as reported by CNN. The arrests were made in Italy, Austria, Romania, and Slovakia following an investigation by the EU prosecutor’s office. Eight individuals were detained, 14 were placed under house arrest, and two were prohibited from practicing their profession.

Assets seized during the raids included high-end vehicles such as Lamborghinis and Porsches, luxury items like Rolexes and Cartier jewelry, cryptocurrencies, luxury villas, and other valuables.

The alleged fraud, suspected to have taken place between 2021 and 2023, has raised concerns about the misuse of the EU’s 800-billion euro recovery fund, with Italy being the largest recipient of the fund.

The European Public Prosecutor’s Office (EPPO) stated that a criminal organization is believed to have orchestrated a scheme to defraud Italy’s recovery packages. The group purportedly applied for non-repayable grants in 2021, ostensibly for small- and medium-sized businesses, but then falsified balance sheets to make it appear that the companies were active and profitable when they were actually fictitious.

After securing around 600 million Euros from Italy’s National Recovery and Resilience Plan (NRRP), the group allegedly transferred the funds to bank accounts in Austria, Romania, and Slovakia. The EPPO also claimed that the group used cryptocurrencies, artificial intelligence, and offshore cloud servers to perpetrate and conceal the fraud.

The incident highlights global concerns about fraudulent activities related to pandemic relief funds. In the United States, a federal watchdog warned about potentially fraudulent distribution of over USD 200 billion in post-pandemic funds by the Small Business Administration.