Author: Francesco Vitale
Committee: Real estate Committee
Date: 26/05/2024
With its recent establishment, the EPPO is emerging as an increasingly efficient and influential entity within the European Union, dedicated to combating crimes that undermine community interests. In particular, we will analyze the commitment of the European Public Prosecutor’s Office to safeguarding the real estate market, aiming to ensure its proper functioning and legality within the European Union. We will examine a case dating back to January 26, 2023.
In the operation known as “Cheap Ink,” the European Public Prosecutor’s Office (EPPO) in Venice, Italy, arrested 18 suspects, allegedly affiliated with a criminal organization that marketed office supplies at discounted prices, fraudulently evading VAT payments, with estimated profits around €58 million. VAT evasion allowed the group to resell imported products, mainly toner for professional printers and stationery, at highly competitive prices, thereby distorting fair competition principles in the market. Additionally, the group is suspected of money laundering through profitable investments both in Italy and abroad, in the tourism, catering, and real estate sectors.(1)
Competent authorities have revealed that, in this case, illicitly obtained sums of money are reinvested in the Italian and European real estate markets by the suspects. This phenomenon represents just one of the numerous instances where proceeds from illicit activities are injected into the European legal real estate market, causing significant issues for the economy. Indeed, the real estate market is an attractive choice due to various advantages, as highlighted by significant investments in the sector, amounting to €175 billion by the end of 2023(2). Such a sum does not escape the notice of criminal organizations. Advantages arise from the ease with which they can exploit real estate transactions to inflate sales prices, allowing the laundering of substantial sums of money in a single operation. Furthermore, investors do not solely consider profitability but also the preservation of capital, as real estate maintains its value over time. Moreover, owning real estate provides criminals with the opportunity to start commercial activities for further money laundering, thereby strengthening organizations in pursuing additional illicit goals to the detriment of European citizens.
Fortunately, the EPPO also has jurisdiction to prosecute money laundering offenses. Thanks to its presence and operational capabilities, the EPPO effectively combats crimes that undermine the EU’s budget and financial interests. Indeed, delegated European prosecutors stationed within the Member States, with the assistance of judicial police, can prosecute both VAT fraud and money laundering resulting from fraud in a single investigative operation, achieving outstanding results otherwise difficult to attain.
The EPPO’s uniqueness lies in its unprecedented ability to conduct transnational investigations with a comprehensive understanding of the scheme. As a supranational prosecution office, the EPPO can coordinate investigations across all participating Member States, swiftly exchange information, and ensure the rapid seizure of assets, as provided for in Article 31 of Regulation (EU) 2017/1939.(3)
In the case of “Cheap Ink,” the court ordered the seizure of money, financial assets, vehicles, real estate, and company shares totaling approximately €58 million, involving 19 individuals and 20 companies. The investigation, lasting over two years, was coordinated by the EPPO and involved the Finance Guards of Alto Adige, in collaboration with investigative units from other European countries, including the Czech Republic, the United Kingdom, Poland, Austria, Slovakia, the Netherlands, and Germany.(4)
In this concluding phase, we observe the practical aspect of the EPPO’s activity, through the measures adopted by judicial authorities and the involvement of various European investigative units. All this is entirely innovative in the European context and made possible thanks to the European Public Prosecutor’s Office.
Sources:
- https://www.eppo.europa.eu/en/news/operation-cheap-ink-eppo-cracks-down-eu58-million-vat-fraud-involving-office-supplies
- https://www.ilsole24ore.com/art/immobiliare-2023-caduta-ancora-anno-la-ripresa-AF7nh7lC
- https://eur-lex.europa.eu/legal-content/IT/TXT/PDF/?uri=CELEX:32017R1939&from=EN
- https://www.eppo.europa.eu/en/news/operation-cheap-ink-eppo-cracks-down-eu58-million-vat-fraud-involving-office-supplies