Fears over wide - spread E.U.

fraud is justified
Tax police in Italy have said European Union funds to develop the tourist sector were instead spent on restoring villas and lavish weddings. Police say they are investigating 63 people, nearly all of them from the town of Vibo Valentia, south of Naples. Bank accounts, cars and properties worth more than 1million Euros $1.31mmillion to be exact - were seized. Those investigated include two officials from Calabria, a stronghold of the 'Ndrangheta crime group. The officials were said to be in charge of distributing the EU money, which was given to redevelop tourist accommodation. The police said at least 1.3m Euros of EU funds was used in fraudulent activities. They also described the crimes as particularly serious because the region needs new tourist infrastructure, the AFP news agency reports. Tax police also said that the money was used to extend and furnish private homes, and to give furniture and televisions to relatives or friends at weddings and other occasions. The investigation is focusing on crimes including aggravated fraud to obtain public funds, embezzlement of EU funds, and using false documents. In recent years the Italian authorities have made progress in combating the country's notorious organised gangs, which still wield immense power, especially in the south. Back in Brussels - Olaf's director general Nicholas Ilett says the structural funds do have built-in checks and balances. Bill Newton Dunn, Liberal Democrat MEP for the East Midlands who served on the EU's Budgetary Control Committee, praises Olaf for some of its work, but complains that the "tiny and under-resourced" service has no power to prosecute when it finds evidence of fraud and with just 18 investigators looking at the distribution of the entire Structural Fund budget, Nicholas Ilett says the ultimate responsibility for preventing fraud lies with each member state: "We have done a lot of detailed work on areas subject to Mafia influence, but fighting serious organized crime is not a matter for an administrative service based in Brussels, but for the police and judiciary in the country in question." The German MEP Inge Grassle argues also that the member states are themselves part of the problem: "We have member states which actively block Olaf and have no interest in really having fraud cases detected. "At the moment, I'm sorry to say only 7% of cases [highlighted by Olaf] are picked up by the member states. This means that 93% of cases are thrown in the paper basket. "Therefore we have an investigation unit which

is not really effective because after the investigation nothing happens. This means we tolerate criminality. I think that this is really bad news." The Structural Funds are given out by the European Commission in Brussels and the EU-wide budget for these money is 350bn Euros for the latest seven-year period (20072013), distributed across 650,000 programs in 27 countries.
Date: apr. 14.2012

Mircea Halaciuga, Esq. 004.0724.58.1078 PROXEMIS - Managementul Riscurilor