Press Release OLAF/07/2000, 5 July 2000
In a major butter fraud, more than 16 000 tonnes of butter were adulterated, and sold for more than 45 million Euros; Community subsidies were then obtained on what was declared as butter. The entire cycle has been traced by the Public Prosecutor's Office in Naples and the Italian Revenue Police, thanks to the cooperation of the European Anti-fraud Office (Olaf) and the Serious Financial Crime Office of the French Judicial Police.
The investigation began early in 1999 when the District Antimafia Branch of the Naples Prosecutor's Office informed Olaf that in the course of a broader investigation into a clan of the Naples Camorra, it had emerged that a Camorra gang had set up what amounted to a Mafia holding group involving the major producers of butter for industrial use in the south of Italy.
The group, which was now in a dominant position, had succeeded in gaining control of one of the largest companies in the industry in Northern Italy, which made it one of the main butter producers in Italy.
Olaf joined in the investigation via its international links and on-the-spot enquiries in Italy, France and Belgium. Evidence came to light of two separate but related forms of crime: the adulteration of butter for human consumption, and fraud at the expense of the Community budget.
In the past few weeks about 70 searches have been carried out on business premises and at private homes in Italy, France and Belgium. The searches were coordinated at international level by Olaf. Large quantities of adulterated butter were seized, and there were numerous arrests and detentions in Italy and France. The enquiries carried out by the District Antimafia Branch (Direzione Distrettuale Antimafia) of the Public Prosecutor's Office at the Naples District Court (Procura della Repubblica presso il Tribunale di Napoli) and by the Italian Revenue Police (Guardia di Finanza: the Special Community Fraud Squad (Nucleo Speciale Repressione Frodi Communitarie) and the Caserta Provincial Command (Comando Provinciale di Caserta)) also made it possible to identify distributors of the adulterated goods, dealers, shippers, suppliers of the false invoices used to disguise the sale of the adulterated butter, and officials of the bodies responsible for supervising the industry who had accepted bribes.
The fraud operated briefly
as follows. In 1997, 1998 and 1999 some 5 000
tonnes of substances of beef tallow and vegetable
material and 400 tonnes of synthetic, laboratory-produced
substances were used in the manufacture of a
total of 16 000 tonnes of finished product,
which was falsely declared as butter. This adulterated
butter was used for the production of foodstuffs,
butter and concentrated butter.
Investigations are continuing in order to determine the precise loss to the Community budget.
Butter is one of the most common ingredients in European food production, and is subsidised by the European Community. The subsidies take the form either of "export refunds" paid when the product is exported to countries outside the Union, or of Community aid towards the processing of butter used in baking which is sold on the Community's home market.
The investigations established that members of the Camorra operating in the Naples area had been working with the complicity of businessmen in Northern Italy and with the help of French and Belgian companies, some playing a leading role and others merely closing an eye to the traffic. They had corrupted public officials to be able to market the adulterated product, which was composed mainly of chemical additives, oils intended for use in cosmetics and non-food uses, and beef tallow: in one case the product seized in a Belgian factory, which originated in Italy, contained no trace of milk or milk products.
Olaf is announcing this large-scale operation only now because of the secrecy ordered by the judicial authorities, that is to say the Naples Prosecutor's Office and the Prosecutor's Office of Créteil in France. Those bodies will also be issuing press releases today.
The outcome of the investigation is the fruit of many years of close cooperation between the European Anti-Fraud Office and the Italian law enforcement authorities, especially the Naples Prosecutor's Office and the Revenue Police, with the Serious Financial Crime Office of the French Judicial Police (Office de répression de la grande délinquance financière de la police judiciaire), and with the Central Economic and Financial Crime Office (Office Central de Lutte contre la délinquance économique et financière) in Belgium.
Mr Alessandro Butticé
Spokesman of the European Anti-fraud Office (OLAF)
Tel: +32 (0)2 29.65425
Fax: +32 (0)2 2963731