OLAF /07/06 Brussels, 23 April 2007
A fraud scheme involving oranges and other citrus fruits has been detected by the Italian law enforcement authorities in co-operation with the European Anti-Fraud Office (OLAF). The public prosecutor's office of Palmi, Italy, has stated today that a total of 45 suspects have been arrested in this case of fraud affecting EU funds. The potential damage to the EU budget is estimated to be up to EUR 50 million.
The public prosecutor's office of Palmi, in the Italian region of Calabria, stated today that a total of 45 suspects have been arrested in the course of an investigation into alleged fraud against EU aid paid for the withdrawal and processing of fresh citrus fruit from the market. The investigations were conducted by the Carabinieri and the Guardia di Finanza and, following a formal request from Italy, OLAF joined the case in May 2005.
The Carabinieri and Guardia di Finanza, in collaboration with OLAF, conducted investigations into several Calabrian fruit producer organisations and the processing companies with which they did business. The initial information obtained by the Carabinieri referred to the marketing years 2000/2001 to 2002/2003. In the course of the investigation it emerged that most, if not all of the fruit supposedly consigned by the producer organisations in question to the processors were fictitious and hence the processed product, i.e. the concentrated juice supposedly sold by the firms and upon which Community aid was claimed and paid, was equally non-existent.
The OLAF contribution to the case focussed on the existence of the production of concentrated juice and checking on the declared destinations of the allegedly processed product. One of the suspect companies in Italy had supposedly processed the fruit received from the producers' organisations and was supposed to have sold the juice to, among others, several firms located outside Italy. The company's books and registers showed large scale sales of juice to companies in Spain and France, in particular.
OLAF carried out on the spot checks in both countries at the declared premises of these supposed buyers and found only apartment blocks, a museum, a car park and a hardware store at the delivery addresses where the juice was supposed to have been processed. Another one of the supposed recipients of the concentrated juice turned out to be a retired farmer (in France) who had never received any such juice from Italy.
OLAF in partnership with its Italian colleagues has reached the conclusion that all the transactions relating to France and Spain in particular as listed in the accounts of the Italian operators involved were totally non existent.
The damage to the EU budget is estimated at EUR 50 million of which EUR 20 million had already been paid out by the Italian Paying Agency -AGEA.
The financial and judicial follow-up of the case is continuing in partnership with the respective OLAF partners in Italy.
Council Regulation n° 2202/96 introduces a Community aid scheme for producers of certain citrus fruits. It is established for producer organisations which deliver citrus fruit grown in the EU for processing on the basis of a contract. In order to obtain the aid, lemons, grapefruit, oranges, mandarins or clementines must be processed into juice.