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Italian Courts Reach Verdict in Elusive Bank of Italy Economist's Elaborate Fraud Scheme

Italian courts are finally approaching the conclusion of a perplexing and long-standing drama surrounding an enigmatic former Bank of Italy economist who embezzled hundreds of thousands of euros while serving as an advisor to a European Union committee.

Italian Courts Reach Verdict in Elusive Bank of Italy Economist's Elaborate Fraud Scheme

From 2009 to 2012, the economist, identified as "G." due to legal restrictions on publishing his name, managed to swindle €234,394.06 from both the Bank of Italy and the European Economic and Social Committee (EESC) through a comically simplistic scheme. His tactics included sleeping in his office while feigning rent payments and fabricating thousands of euros in expense claims, which enabled him to maintain a property in Venice.


Even after being exposed, G. remarkably secured a position at the European Commission, allowing him to continue his deceitful activities for another two years.


Earlier this month, the Italian Court of Auditors in Rome, responsible for monitoring public expenditures, issued a sentencing brief, finally ordering G. to reimburse over €150,000 to the EESC. This verdict comes in addition to a 2019 ruling by a criminal court in Rome, which sentenced him to a year and two months in prison, accompanied by a token fine of €400. Although an appeal is theoretically possible, it is highly unlikely. Italian newspaper Il Messaggero also reported on the outcome of the trial.

The modus operandi employed by G., which allowed him to execute his fraudulent activities for several years without detection by the two institutions, remains shrouded in mystery. However, it aligns with previous evidence suggesting a lack of rigorous standards at the EESC. Authorities took years to initiate legal proceedings against him, and less than half of the stolen funds have been recovered thus far.


Equally baffling is G.'s complete absence and failure to respond to the charges against him. His current whereabouts remain unknown.


"G." joined the EESC in 2009 as a "national expert" on secondment from the Bank of Italy, where he held a senior economist position. Within the EESC, his status resembled that of a consultant rather than an employee directly affiliated with the committee.


The EESC, one of Brussels' longstanding institutions established in 1958 to serve as a platform for employers' federations, unions, and civil agencies to lobby politicians, has experienced a decline in relevance as the European Union's institutions have grown in power. Despite its diminished influence, the EESC continues to incur an annual cost exceeding €140 million to taxpayers.


This environment provided a creatively stimulating backdrop for G., who wasted no time exploiting the system.


The bulk of his ill-gotten gains, amounting to €152,856.97, were acquired by manipulating the "subsistence allowances" provided to national experts by the EESC. While such allowances can be legitimate under certain circumstances, G. surreptitiously claimed them without disclosing that he had already received a wage increase from the Bank of Italy during his secondment.


G. also defrauded his employer in Rome, generating substantial expense claims without providing any documentary evidence to support them. These claims included €11,192 for the transportation of household goods from Brussels to his property in Venice and €64,898 for fabricated accommodation expenses. The Bank of Italy did not respond to requests for comment.


The irregularities in G.'s living arrangements initially aroused suspicion among his colleagues. According to the EESC, the anomalies became apparent when certain "irregularities" related to G.'s use of his office came to light. Analysis of entry and exit times revealed an excessive amount of claimed overtime that did not correspond to the office's actual opening hours. Additionally, G.'s office was found to be adorned with his personal belongings, and the door was tightly sealed to prevent unauthorized access.


A Bank of Italy official, speaking on condition of anonymity, described the situation as a "squalid affair," emphasizing the bank's preference to focus on matters related to monetary policy.

An EESC representative acknowledged that national experts were subjected to stringent financial controls even during the period of G.'s fraudulent activities. The committee has since strengthened its legal framework to ensure more rigorous vetting of potential double claims.


An Italian legal expert, also speaking on condition of anonymity, explained that G.'s absence from court does not imply guilt, as defendants in Italian civil law can choose to be absent from hearings despite the potential consequences. The expert questioned the rationale behind such a decision, stating, "But who in his right mind would do that?"


G.'s refusal to acknowledge the charges against him has complicated the recovery of the stolen funds. The Bank of Italy official stated that G. had become untraceable, and no one had been successful in locating him.


Despite the court's ruling, practical implications may be limited due to G.'s continued absence and unknown status. The EESC expresses confidence in reclaiming the funds, but their ability to do so remains uncertain.


In the end, G.'s return from an unaccountable and extended sabbatical from worldly affairs will determine the outcome. Until then, the enigma surrounding his case continues to baffle all those involved.

By fLEXI tEAM


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