International investors bought bonds backed by the Italian mafia, FT reports

Wednesday 8 July 2020 10:13 CET | News

Investors around the globe have been buying bonds backed by Ndrangheta, a popular mafia in Italy, for four years, according to financial and legal documents seen by the Financial Times.

Thus, an estimated EUR 1 billion in private bonds backed by front companies charged with working for Ndrangheta mafia group were bought by global investors between 2015 and 2019, the report mentioned.

According to Financial Times, Ndrangheta, which is less well-known outside Italy than the Sicilian mafia, has become one of the wealthiest and most feared criminal groups in the western world, over the past two decades. Furthermore, it is estimated that the activities of the Ndrangheta generate a combined turnover of EUR 44 billion a year, according to Europol’s figures. 

These bonds were bought by pension funds, hedge funds, and family offices. In one case, the bonds were purchased by one of Europe’s largest private banks, Banca Generali. The Italian bank purchased those bonds through an instrument constructed by Geneva-based investment bank CFE, the online publication said.

These bonds were created out of unpaid invoices to public health authorities in Italy from companies providing medical services. Almost all were private deals not rated by any credit rating agency or traded in financial markets, the online publication added. 

When contacted by the FT, CFE said it did not knowingly buy assets linked to criminal activity and Banca Generali said it was unaware of any problems with the underlying assets that backed the bonds it had purchased for its clients.

In charge of conducting due diligence on the assets in the securitisation when providing consulting services for the structuring for one of the vehicles purchased by Banca Generali, was accountancy group EY, who declined to comment for FT publication about this situation.

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Keywords: Banca Generali, Ndrangheta, Investors, bonds, Italy, Financial times, due diligence, auditing, accounting, Ndrangheta
Categories: Securing Transactions | Digital Identity, Security & Online Fraud
Countries: Italy
This article is part of category

Securing Transactions