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| Financial-Police,-Provincial-Command-of-Florence |
FLORENCE – The Florence Financial Police and the Florence Customs Agency, coordinated by the European Public Prosecutor's Office, have uncovered a smuggling network worth over €100 million through Operation Broken Wall. A wall of fraud has crumbled under the weight of justice. With Operation "Broken Wall," the Florence Financial Police and the Florence Customs and Monopolies Agency, coordinated by the European Public Prosecutor's Offices of Bologna and Turin (EPPO), have dismantled a criminal network that for years had polluted the European market with goods evading border duties. The resulting measures include six precautionary measures—two detentions and four residence orders—and seizures totaling over €19 million. The VAT fraud discovered by the Florence Economic and Financial Police and customs officials amounts to approximately 90 million euros, following a detailed investigation culminating in the orders issued by the Florence Preliminary Investigations Judge against a Chinese criminal syndicate.
Artificially lowered prices because they are free of tax burden
The fraudulent scheme involved the introduction into Italy of large quantities of Chinese goods, formally destined for other European Union countries. The crux of the scheme was the abuse of the so-called "Procedure 42," which allows the release for free circulation in a Member State without immediate VAT payment, provided the goods are destined for another EU country, where the tax must be paid upon release for consumption. In reality, the goods never left the country: after customs clearance in Italy, they were released directly onto the Italian market at artificially lowered prices because they were exempt from tax. Formally, through the issuance of false invoices and transport documents, they were declared for sale to compliant EU entities. To lend credibility to this fictitious triangulation, the perpetrators used a tax warehouse in Sesto Fiorentino and a galaxy of companies, both Italian and foreign, as fronts.
The Sesto Fiorentino depot
Through simulated intra-Community sales, the goods were intended for foreign customers who in reality did not exist or were merely fronts, while they were introduced into the Italian market with complete tax evasion. In addition to this scheme, the investigation also uncovered abuse of the so-called "Procedure 45," relating to VAT warehouses. These warehouses are used to store goods under tax suspension until sale to the final customer. The syndicate, however, after extracting the goods and issuing self-invoices, issued false invoices to the same compliant EU entities, while in reality the goods were circulating illegally in Italy, resulting in VAT never being paid. In this case too, the Sesto Fiorentino warehouse served as a key hub for concealing the true destination of the goods. The investigation also led to the identification of other individuals, legal representatives of companies based in Bulgaria and Greece with interests in various European Union countries.
Germany, Poland, Bulgaria, Spain, Czech Republic and Hungary
At the urging of the European magistrates in charge of the investigation, international police and customs cooperation channels were activated with the collateral agencies of Germany, Poland, Bulgaria, Spain, the Czech Republic, and Hungary. Their "on-the-ground" operations, carried out at the offices of companies linked to the syndicate and located in the aforementioned countries, confirmed the lack of business structures capable of receiving the large quantities of goods moved, and the sole presence of "virtual" offices and convenient addresses functional to the fraud scheme identified. Objective and subjective connections emerged between the suspects and fictitious corporate entities located in the aforementioned countries, confirming the continental dimension of the fraud. The foreign companies, only "on paper" the recipients of the goods, proved to be mere fronts serving to perfect the criminal plan and create a breach in the European Union's customs barrier.
The most serious damage is not only economic
The damage to the EU and national budgets would have been enormous had it not been promptly halted by precautionary measures and seizures. Precious resources, intended to finance services, schools, hospitals, and infrastructure, would have been diverted from public coffers. But the most serious damage is not merely economic: it is systemic damage. Placing goods on the market at rock-bottom prices, made possible by tax evasion, distorts competition, brings rule-abiding businesses to their knees, and grants unfair advantages to those who violate them. "Broken Wall" takes its name from this artificial construction of false procedures with which the syndicate attempted to protect its fraud system. That wall has been torn down. The operation was made possible thanks to the direction of the European Public Prosecutor's Office, which coordinated the work of Italian authorities with those of Germany, Poland, Bulgaria, Spain, the Czech Republic, and Hungary, demonstrating how Europe, when acting as a cohesive community, can effectively combat transnational criminal activity.
Large batches of e-bikes imported
During the investigation, it emerged that, through false customs value declarations, the syndicate had managed to import large shipments of e-bikes, declaring customs values up to ten times lower than their actual value (at a price between €50 and €110 each, less than a tenth of the market value). Furthermore, during individual customs clearance checks, approximately half a million items of contraband clothing have already been seized. In addition to the arrests and seizures, targeted searches have been conducted and extensive documentation, including digital documents, has been acquired. The latter has been analyzed with the assistance of qualified personnel from the Guardia di Finanza's Special Unit for the Protection of Privacy and Technological Fraud. This documentation will be analyzed to complete the reconstruction of the fraudulent chain and identify any further responsibilities. The message is clear: the Italian State and the European Union do not simply monitor, but react decisively; they do not just monitor, they strike; they not only defend, but restore citizens' confidence.
Economic and financial intelligence, risk analysis and control of goods flows
This confirms that economic legality is not an abstract formula, but a concrete choice of justice and democracy. Added to this is the strategic value of the oversight guaranteed by the Guardia di Finanza and the Florence Customs Agency throughout Tuscany. The combined efforts of economic and financial intelligence, risk analysis, and control of goods flows have prevented the distortions created by the conspiracy from overwhelming key sectors of the regional manufacturing fabric, from the textile-fashion district to leather goods and logistics. The restoration of fair competition protects honest entrepreneurship, safeguards skilled employment, and defends the reputation of Tuscan business practices, founded on quality, traceability, and compliance. The results achieved have repercussions that transcend regional borders. The recovery of the tax base and the neutralization of artificially low prices strengthen the entire national economic system, preventing illicit capital from polluting legal supply chains and distorting competition.
The ability to intercept fictitious triangulations and abuses of special regimes in time
The counteraction, made possible by the operational synergy between the Guardia di Finanza and the Customs and Monopolies Agency , increases the perception of risk for fraudsters, stimulates tax compliance, and contributes to a more attractive business environment for law-abiding investors. This enforcement, built on targeted controls, database cross-referencing, verification of tax deposits, and tracking of flows, represents a replicable model. The ability to promptly intercept fictitious triangulations and abuses of special regimes reduces the operating margins of criminal organizations and frees up competitive space for viable businesses. In this scenario, the role of the European Public Prosecutor's Office is crucial, providing a strategic and unified framework for the entire investigation, transforming national investigative activities into a common and effective action at the supranational level. The EPPO has ensured consistency, timeliness, and continuity, strengthening the bond of trust between citizens, national, and European institutions, and ensuring the protection of shared financial interests.
Customs procedure 45 relating to VAT warehouses
The charges are provisional and subject to further judicial review during subsequent procedural phases. The defendants are innocent until convicted. Legal insight: Customs Procedures 42 and 45. Customs Procedure 42 , under EU law, allows goods to be released for free circulation in a Member State with immediate VAT suspension, provided they are destined for another EU Member State, where the tax must be paid upon release for consumption. The purpose is to facilitate intra-EU flows. The abuse consists of misrepresenting goods as destined for foreign countries, while they are actually released onto the domestic market without payment of the tax. Customs Procedure 45, relating to VAT warehouses, allows goods to be introduced into authorized warehouses with a tax suspension, with the obligation to pay VAT upon extraction for domestic sale. The abuse involves removing goods from the warehouse with a self-invoice and then issuing false intra-Community sales invoices, thus releasing the goods directly onto the domestic market without ever paying the tax. Both mechanisms, conceived as simplification tools, when distorted become powerful levers of carousel fraud, with serious repercussions for the treasury, competition, and the productive fabric.
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