A court in Naples has convicted and sentenced several members of a criminal organisation involved in large-scale VAT fraud, following an investigation led by the European Public Prosecutor’s Office (EPPO).
The case centred on a scheme to sell electronic goods at artificially low prices by systematically evading value added tax through so-called “carousel fraud”, which exploits EU rules on cross-border transactions.
Prison Sentences and Confiscations
On 8 January 2026, the Court of Naples convicted four defendants – an accountant and three entrepreneurs – sentencing them to between six and ten years in prison. The court also ordered the confiscation of around €3 million, which had been seized earlier in the investigation to recover unpaid taxes.
A member of the Italian Financial Police (Guardia di Finanza) who had been charged in the same proceedings was acquitted.
Seven other suspects reached plea agreements, which were approved by the court and are now final.
Among those who pleaded guilty were three serving members of the Financial Police, who accepted prison terms ranging from two years to four and a half years. A senior manager from Italy’s tax collection agency, Agenzia delle Entrate – Riscossione, also agreed to a four-year sentence.
All were accused of accepting bribes in exchange for slowing investigations, interfering with tax audits, avoiding enforced payments, and accessing police and judicial databases without authorisation.
Two further defendants – an accountant and a personal aide – admitted their role in supporting the group’s activities and accepted sentences of between four years and five years and four months. A middleman in the scheme received a two-year prison sentence.
Carousel VAT Fraud
Carousel fraud is a sophisticated form of tax evasion that relies on repeated cross-border transactions within the EU. Goods are sold between companies in different countries, allowing VAT to be claimed but never actually paid.
The practice has cost European governments billions of euros over the past decade and has been a growing focus of EU-level prosecutors.
Similar investigations into tax fraud and organised financial crime in Italy include cases involving false invoicing and public sector corruption.
Role of the Financial Police
The EPPO said the investigation was carried out in close cooperation with the Guardia di Finanza in Naples, whose officers were instrumental in uncovering the network and identifying corrupt officials within their own ranks.
Authorities said the case demonstrates both the scale of VAT fraud in Italy and the increasing role of European prosecutors in tackling cross-border financial crime.
