REAL MONEY FOR FICTITIOUS TOBACCO

OLAF /08/05 Brussels, 23 April 2008

No health risks to smokers but three million Euros in damages to European taxpayers were caused by a large-scale fraud with fictitious tobacco. A scheme involving the claim of EC agricultural subsidies for over 900,000 kg of non-existing raw tobacco has been discovered by the Italian Carabinieri police force with the support of the European Anti-Fraud Office (OLAF). There are currently 80 individuals under investigation by the Italian judicial authorities in the context of this operation named “Ghost Tobacco”. The illegally claimed Community funds are to be recovered and administrative fines of around 20 million Euros have been imposed.

According to the Carabinieri’s findings producers, processors and transport companies alike were involved in this attempt against the EC’s agricultural funds. OLAF contributed to the detection of the Italian-based fraud scheme that extended over several countries by carrying out on-the-spot checks in Luxembourg, the Netherlands, France, Austria and Romania. The Carabinieri, over the last ten months, carried out searches, observations and other activities concerning the economic operators involved in Italy. The case lies with the public prosecutor’s office (Procura della Repubblica) in Perugia.

Two main fraud schemes were discovered: In the first one, shipments to foreign companies were feigned in order to conceal the non-existence of the raw tobacco from the Italian control bodies and to evade paying value added tax. In the second scheme “tobacco carousels” were created, producer A taking tobacco to the processor who returned it to producer B who, again, brought the same tobacco to the processor and so on. EC funds were illegally claimed for all transactions.

Alessandro Butticé
Head of Spokesman, Communication and PRUnit
Tel : +32 (0)2 296.54.25
Fax : +32 (0)2 299.81.01
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