Milano hidden bank scheme unraveled, seven arrested

Italian financial police (Guardia di Finanza) dismantled a sophisticated “banca occulta” operating in Milan. The network used a set of shell companies (“società cartiere”) to issue false invoices amounting to about €134 million, allowing client firms—mainly in the metal‑working sector—to reduce taxable income. The fraudsters then transferred the proceeds abroad, chiefly to Chinese accounts, moving roughly €80 million, and returned the money to Italian entrepreneurs as cash through a “cash‑back” system managed by Chinese couriers.

Seven people were placed under precautionary measures: four are on house arrest, a chartered accountant has been barred from practice, and two others must report to police or remain at a fixed address. The courts ordered preventive seizure of assets worth approximately €2.5 million, including cash found in a Milan apartment used as the operation’s hub and high‑tech bank‑note counters. The investigation follows earlier May raids that seized over €1.7 million in cash and assets.

The case highlights an underground banking model that bypassed anti‑money‑laundering controls, resulting in large-scale tax evasion and illegal capital flows.