Finance Police

Operation “China Express”: international tax fraud scheme worth €1.5 billion dismantled

The Italian Finance Police have uncovered a complex fraud scheme in the wholesale and retail clothing sector. 192 people have been charged and over 200 companies are involved. Assets worth over 7 million euros have been seized.

by Pietro Menzani

29 July 2026

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GUARDIA DI FINANZA, GDF, AUTO, 117 IMAGOECONOMICA

4' min read

Translated by AI

Versione italiana

4' min read

Translated by AI

Versione italiana

192 people charged, over 200 companies implicated and preventive seizures carried out against 22 business owners operating in 14 different Italian regions. This is the outcome of a raid by the Savona Financial Police, which dismantled a complex fraudulent scheme in the wholesale and retail clothing sector based on the issuance and use of false invoices. The large-scale operation was named ‘China Express’.

The start of the investigations

The investigations began with a tax audit of a beauty salon in Albenga, in the province of Savona, run by a person of Chinese origin. Checks carried out by the Guardia di Finanza revealed that, despite having no stock, staff or managerial or financial capacity, the business had issued invoices for the wholesale sale of clothing to 204 companies operating throughout Italia and abroad, totalling approximately 20 million euros.

At this stage, the businessman was reported to the local Public Prosecutor’s Office for issuing invoices for non-existent transactions and for destroying and concealing accounting records. But that is not all. Following a thorough process of gathering documentary evidence, analysing accounts, and carrying out personal, home and digital searches, as well as conducting interviews, the 192 recipients of the false invoices were reported for using invoices relating to non-existent transactions.

The fraudulent scheme

The investigation carried out by the Guardia di Finanza has led to the hypothesis that a specific and recurring pattern exists: numerous businesses operating in the wholesale and retail trade of clothing and costume jewellery are believed to have recorded in their accounts invoices for non-existent transactions issued not only by the first business owner implicated in the investigation, but also by numerous other parties.

The invoices found contained numerous irregularities. Those relating to the sale of goods were vague, listing items such as ‘Shoes’, ‘Jewellery’ and ‘Jeans’ but without specifying the quantity, price or model of the goods in question. Those relating to the provision of services, such as massages, contained irregularities both in terms of the amounts declared and because they were issued to companies operating in the wholesale or retail sectors.

Under this scheme, according to the reconstructions, those who purchased the goods would have gained both tax advantages – thanks to the deduction of the cost and the VAT shown on the invoice – and commercial advantages: by doing so, they were able to make purchases from the actual supplier entirely off the books at preferential rates, and then resell the products at prices significantly below market value.

A turnover of 1.5 billion

According to estimates by the Guardia di Finanza, thanks to this fraudulent scheme, the companies against which preventive seizure orders were issued are believed to have generated a turnover of around 700 million euros between 2017 and 2025. In total, the sums handled by the companies in question amounted to around one and a half billion euros.

The investigations subsequently led to charges being brought against the main users of invoices for non-existent transactions – based mainly in Lazio, Lombardy, Piedmont and Tuscany – for tax evasion amounting to approximately 116 million euros.

Frontmen

Furthermore, the companies involved in the investigations were registered in the names of frontmen who often did not even speak Italian and had no business acumen or financial resources; in some cases, they were even living inside the companies’ warehouses.

One company, for example, was registered in the name of a 60-year-old Chinese woman who had not been in Italia since 2022, whilst her luxury cars were used on a daily basis by a family – also Chinese – who were formally completely unconnected to the company. Furthermore, two supermarket chains and ‘hypermarkets’ in the Marche and Emilia-Romagna regions, respectively, were formally managed by a 19-year-old Pakistani man and a 50-year-old woman from Casalnuovo di Napoli, both of whom had no assets and lacked managerial skills, but whose bank accounts were managed by a 50-year-old Chinese man who, despite never having declared any income in Italia, owned property and cars worth over three million.

However, the investigations made it possible to trace the companies’ actual directors. In some cases, these were individuals who were formally employed by the companies. In other cases, however, they were complete outsiders, yet had full control over the companies’ bank accounts, an excellent command of the Italian language, a thorough understanding of the companies’ affairs, and were the owners of high-value movable and immovable property registered in their names. This was the case with a 40-year-old Chinese man living in Milan, who owned around ten companies and had approximately six million euros in his bank accounts.

Kidnappings

The operation led to the preventive seizure of assets with a total value of several million euros and the automatic cancellation of 105 VAT registration numbers. Cash, shares, company shares, investment funds and insurance policies worth over one million euros were seized, as well as valuables, jewellery, handbags and luxury watches worth around 500,000 euros. The preventive seizures also included eight luxury properties located in Rome, Milan, Prato, Vigevano and Reggio Emilia, with a value estimated at around seven million euros according to initial estimates.