ROME, July 23 Italian police have smashed a
major tax evasion ring that smuggled 1 billion euros ($1.32
billion) a year for prominent show business, business and
banking figures into the tiny state of San Marino, prosecutors
said on Tuesday.
The Rome prosecutor's office said the system served about
1,500 clients and had been operating since at least 2000.
Tax evasion is estimated to cost Italy 120 billion euros a
year, and cracking down on the practice has been a key part of
recent efforts to reduce a huge public debt, equivalent to
nearly 130 percent of annual output.
A prosecutors' statement said managers of the now defunct
San Marino Investimenti (SMI) group smuggled money into the
world's smallest republic, an enclave in northeast Italy, then
invested it in low-tax jurisdictions such as Panama, Luxembourg
and the U.S. state of Delaware.
Seven former SMI employees are under investigation on
suspicion of international conspiracy, money-laundering, and
providing illegal investment and financial services, the
statement said. No charges have been brought so far.
SMI went into receivership last year.
Italy has one of the world's highest rates of tax evasion,
with recent investigations ensnaring fashion designers Domenico
Dolce and Stefano Gabbana, and a government minister forced to
resign after it emerged she had avoided property tax.
Former Prime Minister Silvio Berlusconi is awaiting the
result of a final appeal against a conviction for complicity in
tax fraud at his Mediaset empire.
($1 = 0.7580 euros)
(Reporting by Naomi O'Leary and Massimiliano di Giorgio;
editing by Barry Moody and Paul Taylor)