EU Court Freezes $77 Million in Alleged VAT Fraud Scheme Involving 13 Chinese Nationals

Prosecutors say the syndicate evaded taxes by setting up 29 front companies in Italy then shutting them down within two years.

Police patrol at the main entrance of the Cavalieri Waldfor Astoria hotel in Rome on March 14, 2022, where U.S. national security adviser Jake Sullivan will meet wth senior Chinese Communist Party diplomat Yang Jiechi. Filippo Monteforte/AFP via Getty Images

The European Public Prosecutor’s Office in Rome is investigating a multimillion-euro customs and value-added tax (VAT) fraud scheme in which 13 Chinese nationals and four Italians were arrested for the illicit import of clothing, shoes, and accessories from China.

The prosecutor’s office noted that a judicial order was executed in Florence, Italy, prompting the country’s financial police, the Guardia di Finanza, to freeze 71.05 million euros ($77 million) on March 6.