Author: Aurora Fontan
Committee: Real Estate Transactions Committee
Date: 06/05/2025
In 2024, a major case of fraud and misappropriation of European Union funds emerged in Naples, shedding light on the vulnerabilities of EU financial systems and the crucial role of oversight bodies like the European Public Prosecutor’s Office (EPPO).
The case involved a Naples-based consultancy firm that obtained two significant grants: €300,000 to develop e-commerce solutions and €1.3 million from the Recovery and Resilience Facility (RRF), intended to support small and medium-sized enterprises during post-pandemic recovery efforts1.
Rather than using the funds for their declared purposes, the firm orchestrated a complex scheme involving also falsified financial statements. The money was siphoned off through an international network of companies with bank accounts in Belgium, Bulgaria, Lithuania, and the United Kingdom. Ultimately, these funds were laundered and reinvested in real estate assets in Luxembourg, an increasingly common tactic to conceal illicit gains.
Investigations revealed that the legal representatives of the companies involved were allegedly complicit in the fraud, as evidenced by the complete absence of any legitimate commercial activity of the companies. On the basis of this evidence, the judge for preliminary investigations in Rome, acting on the request of the EPPO, authorized the seizure of assets worth €1.3 million. Among these were real estate properties in Stintino (Sardinia) and Rome (Lazio) 2. The Guardia di Finanza played a central role in uncovering the operation and supporting the EPPO throughout the investigation 3. Investigators also uncovered the involvement of a white-collar accomplice, a chartered accountant, who allegedly assisted in falsifying the financial documentation used to secure the grants. His professional expertise was instrumental in crafting the fraudulent statements, which helped the scheme evade initial scrutiny. This highlights the critical risk posed when trusted financial professionals exploit their position to enable fraud.
The European Public Prosecutor’s Office was involved in this case due to its cross-border nature and the misuse of EU financial resources. Established under Regulation (EU) 2017/1939 4, the EPPO has the authority to investigate and prosecute crimes affecting the financial interests of the European Union, such as fraud, corruption, and cross-border VAT evasion. In this instance, the transnational movement of funds and their ultimate investment in Luxembourg real estate highlighted the need for coordinated European-level action, precisely the kind of case the EPPO was created to handle.
This case also reignites the debate on how to effectively fight money laundering and protect EU funds from misappropriation. Real estate, with its high-value transactions and often opaque ownership structures, remains one of the preferred instruments for laundering illicit funds. To combat these threats, a multi-layered strategy is essential. Enhanced due diligence in real estate transactions, increased transparency in corporate ownership, and better cooperation between financial institutions and law enforcement are all vital.
Moreover, the EU and its member states should invest in more regulatory frameworks that forecast real-time data sharing. Public-private partnerships and advanced data analytics tools can also aid in detecting unusual financial patterns that may indicate fraud. Ultimately, while the EPPO is a powerful instrument, it must be supported by a wider ecosystem committed to accountability, integrity, and the protection of European financial interests.
1 Rai News – TGR Campania, Frode su fondi europei, 1.3 milioni di euro sequestrati, luglio 2024, https://www.rainews.it/tgr/campania/articoli/2024/07/frode-su-fondi-europei-13-milioni-di-euro-sequestrati-0f7b577a-43ff-4225-98cf-7951f8f6236f.html
2 ANSA, Frode e appropriazione indebita fondi Ue: sequestro a Napoli, 11 luglio 2024, https://www.ansa.it/campania/notizie/2024/07/11/frode-e-appropriazione-indebita-fondi-ue-sequestro-a-napoli_2dd1c131-af2d-4af8-b2f6-bd7360b7502c.html
3 I Fatti di Napoli, Napoli: frode su fondi UE, sequestrati beni per 1,3 milioni, luglio 2024, https://www.ifattidinapoli.it/articolo_6690459a648a5378ff7f4923
4 Council Regulation (EU) 2017/1939 of 12 October 2017, implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (EPPO). See in particular Articles 4 and 22 for provisions on competence and investigative powers