16 million-pint beer ‘export’ to Malta leads to discovery of €150m tax fraud

[Italkcash Newsfeed]

How much beer could the Maltese possibly drink, Italian authorities must have asked themselves when they came across what appeared to be a disproportionately large consignment of beer destined for Malta from an Italian businessman in Cesena.

The simple question posed two years ago led to a massive tax fraud investigation, which eventually uncovered a €150 million value added tax fraud operation and a €2 million beer tax fraud related to fake beer shipments to Malta that never took place, but which in reality were destined for the Italian market itself.

The €2 million in beer tax fraud effectively meant the Italian businessman, who was arrested last month and is now facing trial, had purported to be shipping 16 million pints of beer to the Maltese market.

Upon further investigation, the Italian authorities also found fake Maltese Customs stamps at the businessman’s Cesena warehouse.

It was a routine check by the Italian authorities on a small firm purporting to be exporting beer to Malta, according to Italian prosecutors in “absolutely excessive quantities for the country’s small market” that spurred investigations in February 2006.

Ensuing investigations by the Italian authorities, OLAF – the EU’s anti-fraud agency, and the Forlì Customs department into the business conduct of Guido Minerva uncovered an enormous tax fraud operation amounting to the evasion of some €150 million in value added tax involving not just beer but items such as foodstuffs, clothing and telephones.

The scheme, according to Italian prosecutors, was run through a number of front companies set up in Malta, Italy, Finland, Denmark, Sweden, Poland, Estonia and Romania. Malta is only believed to have been used as a fictitious destination for the beer segment of the multi-million euro fraud operation.

Mr Minerva, Italian prosecutors have charged, possessed an in-depth knowledge of the complex international and European tax regimes, which he used to create a ring of front companies supporting the operation. Through the scheme, goods were masked as having been exported, and VAT reimbursements were then claimed from the Italian tax authorities as per EU rules. The goods, however, were never exported but were sold on the Italian market instead.

The discovery of the beer consignment purportedly destined for Malta led to a huge two-year investigation involving 84,000 individual phone taps, the interception of 24,000 e-mails, three arrests, 47 raids, and the levelling of 33 charges.

The scheme’s architect, Guido Minerva, has been arrested, as have his wife Rosaria Vernucci and the couple’s secretary Fortuna Maisto. The latter was not imprisoned as she is pregnant and is under house arrest. All three are from Naples.