Gaddafi family says Italy asset seizure illegal

ALGIERS, March 29 Thu Mar 29, 2012 6:52pm EDT

ALGIERS, March 29 (Reuters) - Muammar Gaddafi's family described as illegal on Thursday the seizure of 1.1 billion euros ($1.46 billion) worth of assets that Italian police said belonged to members of the ousted Libyan leader's family.

The assets, including stakes in blue chip Italian companies, a Harley-Davidson motorcycle and a chunk of forest on a Mediterranean island, were held by Libya's sovereign wealth fund on behalf of the Gaddafi family, Italy's tax police said.

A lawyer who represents Gaddafi's daughter Aisha and son Saadi, both of whom have been in exile since a rebellion last year ended their father's rule, said the assets were part of legitimate investments by the sovereign wealth fund.

"The Italian seizure of assets comprise a belated and illegal compliance with a dubious court order and a persecutory sanctions regime," the lawyer, Nick Kaufman, said in a statement on behalf of the Gaddafi family.

"Not one dollar was used for the personal benefit of the Gaddafi family and not one cent comprises the proceeds of criminal activity."

"The regime of the late Muammar Gaddafi proudly supported Italian industry through its various state investment funds - doing so for the ultimate benefit of the Libyan people," the statement said.

Italy, Libya's former colonial ruler, was once Gaddafi's closest European Union ally. His administration, using a huge pot of money accumulated from sales of oil, was a major investor in Italian firms.

But since the rebellion, international institutions and the new Libyan leadership have been trying to recover assets they say the Gaddafi family stole from the Libyan state.

Officials in Tripoli said these assets could amount to billions of dollars and that a large proportion have been secreted abroad, in many cases using elaborate financial mechanisms to mask their origin.