On January 8, 2021, the luxury yacht “Blanca” of fifty meters length, flying the British flag, built-in 2008 by Baglietto Shipyard, was confiscated by the Italian Financial Police (Guardia di Finanza) off the coast of Genoa, Italy.
The owner of the yacht, a well-known Italian entrepreneur and owner of a concrete manufacturing company and of a cycling team, was under investigation for the criminal offenses of self-laundering and tax fraud. During the investigation carried out by the Public Prosecutor’s Office at the Court of Milan, the yacht was confiscated for disproportionality. In particular, this kind of confiscation, also known as extended confiscation, is a measure of patrimonial prevention, provided by Italian law, which may be ordered in relation to money or assets, whose origin cannot be justified and that is disproportionate to their owner’s stated income. The purpose of such a measure is to avoid that the assets will being used to commit future crimes. Since disproportionality is needed in order to issue this kind of confiscation, it should be pointed out that it is calculated by comparing the value of the assets with their owner’s stated income and/or his business activities. In this regard, the Italian Court of Cassation clarified that the assets may be confiscated even if they do not directly derive from criminal activities (Italian Court of Cassation, Decision no. 41780/2021).
In the instant case, the Italian Financial Police found a disproportion between the income stated by the entrepreneur in the last fifteen years and the expenses related to the lease-purchase and management of the yacht in the same period of time. In addition, an elaborate tax fraud system emerged from the investigations. It consisted of the issuance of false invoices linked to non-existent advertising services. The proceeds of tax fraud were transferred to off-shore companies based in Croatia, Switzerland, Monaco, and Panama, functional to the purchase and management of the yacht. The ownership of the yacht belonged to a shell company, based in the United Kingdom with bank accounts in Switzerland and Malta, but the investigations later revealed that the yacht’s UBO was the entrepreneur. The total amount of the laundered money was about five million euros, which were used for the purchase and management of the yacht, evading taxes. Apparently, the entrepreneur paid back that amount to the tax authorities.
On June 1, 2021, the Public’s Prosecutor Office at the Court of Milan revoked the yacht’s confiscation. In fact, the Public’s Prosecutor Office acknowledged the lack of disproportion between the entrepreneur’s income and the value of the yacht and so the requirements for confiscation, provided for by article 240-bis of the Italian Criminal Code, no longer existed.
In addition, the entrepreneur’s defense attorneys asserted that the value of the yacht amounted to 32.8 million euros and the entrepreneur’s stated income amounted to 42.5 million euro, so there was no disproportion. The above statements were deemed acceptable by the Public’s Prosecutor Office at the Court of Milan, which revoked the confiscation for lack of the relevant requirements, provided for by article 240-bis of the Italian Criminal Code. On September 6, 2021, the entrepreneur’s defense attorneys informed the Italian Court of Cassation of the revocation of confiscation via certified e-mail. Nevertheless, it is still unclear whether the Italian Court of Cassation has received it.
On November 17, 2021, the Italian Court of Cassation confirmed the yacht’s confiscation.
It is deemed that, in the present case, the Italian Court of Cassation has committed a procedural error. Since the confiscation was already revoked, the Italian Court of Cassation should have considered the appeal inadmissible due to the applicant’s lack of interest.
For more information on this please contact:
Gianfranco Puopolo
Partner/Head of Superyacht Team
E.: g.puopolo@pglegal.it
Domenico Rinaldi
Partner/Tax Specialist
E.: d.rinaldi@pglegal.it