A multi-million euro fraud of EU agricultural funds run by a crime group in Italy that spanned several EU countries involved two companies registered in Ireland.

Last week, special units of the Italian police force conducted a raid in southern Italy against a criminal group with links to the mafia. As part of the case, it was discovered that a group called ‘Società Foggiana’ was engaged in a sophisticated fraud scheme at the expense of EU agricultural funds.

Investigations by the European Anti-Fraud Agency (OLAF) found some €9.5m in rural development money had been syphoned off by the group.

The two registered Irish companies were found to have ties to the criminal group in question.

They were used as intermediaries in the gang’s complex scheme, OLAF told the Irish Farmers Journal.

A company based in Italy and two based in Portugal were also part of the circular scheme involving the two Irish companies

It involved the purchase and re-sale of machinery at an inflated price to defraud EU rural development funding. A subsequent process then took place to return the amounts in question back to the fraudsters. This was achieved through the fictitious sale of food products.

A company based in Italy and two based in Portugal were also part of the circular scheme involving the two Irish companies, OLAF said.

In total the network of fraudulent companies stretched to seven EU member states with fictitious companies used to cover the traces of fraud and facilitate the money laundering.

Due to the complex nature of the scheme and the involvement of several different entities, an OLAF spokesperson said it was not possible to determine the exact amount of defrauded funds connected to the Irish companies.