19 Feb 2020
By Matteo Civillini, Giulio Rubino, Cecilia Anesi, Investigative Reporting Project Italy (IRPI)
OCCRP — Fabio Castaldi is surprisingly hard to find in London for a man who has registered hundreds of companies there.
He supposedly runs a tax consultancy out of a co-working space in Moorgate, in the city’s central business district, but nobody there had ever heard of him. Nor did his name ring a bell for a receptionist in an imposing Edwardian building overlooking the oldest public park in London, previously listed as his firm’s headquarters.
Where Castaldi does keep popping up is in the case files of Italian financial police who investigate money laundering and other illicit financial flows between Italy and the UK. They say he has a track record of creating companies used for criminal activities. (Castaldi himself denies any criminal involvement, and says he cannot be held responsible for what his clients do with the firms he helps them create.)
Experts say his years-long career as a professional formation agent sheds light on how London has become a haven for money laundering by organized criminal groups, in part because it is so easy to create companies in the UK.
The 54-year-old Italian, a self-described accountant and expert in international law and taxation, set up a UK-based consultancy, Castaldilawyer & Partners, in 2008. (He is not a lawyer in either Italy or the UK.)
Since then, Castaldi and his company — which he later renamed “Castaldi Lawyer” — have appeared in at least four separate Italian police investigations into tax evasion, bankruptcy fraud, and money laundering. In one case he is about to go on trial, while in another, he is under investigation pending the issuing of an indictment. In two others, Castaldi’s firm is named as a “service provider” for the criminals.
Castaldi’s clients include a luxury ceramic-tile retailer now on trial for laundering mafia money, a rising young politician arrested for embezzlement, and a group of businessmen from Italy’s wealthy northeast accused of massive tax fraud.
In one case, in the northeast city of Vicenza, he was indicted for what Fiscal Police said was his “central role” in an elaborate scheme to cheat tax authorities out of 130 million euros in value-added tax (VAT). Castaldi was accused of transforming Italian companies used in the alleged fraud into British companies he controlled, thus obstructing investigations. He was even arrested on these charges in Rome in 2016, but was released shortly afterwards as the investigation continued. (It is still pending.) Castaldi told OCCRP he was innocent of these allegations.
Castaldi also played a prominent role in a multi-million-dollar fraud police uncovered in Catania, Sicily, a year ago, according to court records. He was accused of conspiring with an Italian lawyer in a series of bankruptcy frauds between 2013 and 2015.
Together, the two men allegedly helped indebted businessmen dodge taxes and creditors by stripping companies of assets and transferring them to newly created firms in the UK or Croatia, making it difficult for creditors to exact their due.
Investigators accused Castaldi and alleged co-conspirators of other crimes in the Catania case, too, including tax evasion, misappropriation of funds, and destruction of financial records. In total, authorities estimate the case involved at least 10 million euros in illicit profits. Castaldi was charged with several counts of bankruptcy fraud and money laundering and is currently being tried in Catania. He told OCCRP he was innocent of these charges as well.
In two other cases, Castaldi is not accused of direct involvement in wrongdoing, but his firm is named as a “service provider” in connection with alleged crimes.
In one of these, Antonio Scimone, a 43-year-old Italian businessman, is charged with using Castaldi’s services to set up and manage multiple UK-registered companies that moved money belonging to the ’Ndrangheta mafia out of the EU. He is also accused of using the same companies in a complex scheme known as a carousel fraud, to avoid paying taxes on the money as it moved around Europe.
Scimone told OCCRP that all the allegations were false. “I reject any accusation of contact with the ’Ndrangheta,” he said. “Unfortunately, there is prejudice because I am an entrepreneur from Calabria, and Calabria equals ’Ndrangheta.”
He threatened to sue if journalists wrote about the accusations that he had moved mafia money through the UK.
“We moved to London those Italian companies that had a tax debt, but there isn’t anything illegal about it. In the ongoing judicial proceeding, we are charged with transferring money abroad without real movement of goods. Our defense is that we have really moved goods, and I can prove it.”
Authorities see things differently. A semi-annual report from the Italian Antimafia Investigations Directorate, published in July 2019, highlighted the Scimone case as an example of how the UK has become a problem jurisdiction for Italian investigators trying to track the movement of criminal money across borders.
The ease of company formation in the UK allows “immediate operativity of a corporation (Ltd.) or trusts, entities that are sometimes also used by criminal organizations,” the report said.
The investigation “made it possible to dismantle an ’Ndrangheta group which, by using a qualified professional, was engaged in money laundering and re-use of criminal money in the United Kingdom,” the report continued.
Read more at OCCRP
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