Convicted of fraud, both men have been sentenced to three and a half years in prison by a court in Pordenone.
Assets valued at €16m belonging to the men and the legal persons involved had already been seized following a pre-trial investigation. This marked the first step in the recovery of the EU money lost through the evasion of quota levies.
Explaining what the next move could entail, a spokesperson for the European Anti-Fraud Office (OLAF) told DairyReporter.com: “In this specific case, the confiscation order could enable, when the decision will become final, to activate a forced sale procedure of the assets under confiscation.”
A total of €20m in levies was left unpaid as part of a fraud scheme involving a network of companies. Farmers created cooperative companies that did not do any real business at all but gave the appearance of being first purchasers of milk so the farmers could evade the extra levy that must be paid by all EU milk producers that exceed a certain milk quota.
The OLAF explained that as first purchasers of milk these cooperative companies “would be obliged to keep the levy on the “extra-quota” milk produced and to transfer the money to the Italian body responsible for collecting the levies.
“In practice, the cooperative companies do not do so; in fact, they do not carry out any real business activity at all. Subsequently, the milk is sold to the dairies. On paper, the sale seems to involve the cooperative companies and the dairies, but in practice it takes place directly between the producers and the dairies. This way, the producers are able to sell their extra-quota milk to the dairies without paying the levy.”
According to the OLAF, some of those involved in the fraud scheme had already been prosecuted in a similar case in Saluzzo. In the latest court case in Pordenone, the OLAF, equipped with information on the Saluzzo case, provided the prosecutors with legal assistance.
The EU anti-fraud body said that together these two cases represent “significant judgements in creating a case law for similar cases in Italy.”
In Italy milk quota fraud schemes have resulted in over €100m in milk levies evaded between 1998 and 2006.