Key officials in the Province of Como’s tax office (the Agenzia delle Entrate) have been convicted of taking bribes in exchange for heavily discounting local businessmen’s tax bills. The state has lost out on over €2 million in tax revenue as a result of a system for defrauding the authorities hatched by the actual chief of the tax office in league with one of the most prominent accountants in the city. To this date sixty people have been arrested linked to thirty five individual cases of corruption. These amount to six senior officers of the Agenzia delle Entrate including the previous Director, its Head of the Legal Office and another official from the Milan office. The scale of the scandal, first exposed in July 2019, has uncovered an institutionalised system for obtaining massive discounts on the tax liabilities of businesses or individuals in exchange for illicit cash payments. Such backhanders are known here as ‘tangenti’, made famous in the ‘tangentopoli’ scandal centred on Milan in the 1990s which brought about the fall of Bettino Craxi and Italy’s First Republic. Como’s scandal is a provincial rather than a metropolitan ‘tangentopoli’ and thankfully does not involve politicians. Yet it is similar to the Tangentopoli trials of the 1990s in revealing a murky side to supposedly respectable society. It has cast an unfavourable light on a particular strata of Como’s provincial society piercing through layers of social pretension to reveal greed and corruption.
What Is the Agenzia delle Entrate?
An office of the Agenzia delle Entrate exists in every Italian province forming part of a national structure of public administration under the responsibility of the Ministry of Finance. All residents will have had to apply to it to obtain the all-important ‘codice fiscale’. Property owners will have greater contact since the office determines the level of all property taxes including those incurred through changes of ownership including inheritance. They have overall responsibility for the administration and collection of both local and national taxes including VAT payments. They identify errors in tax returns and call upon the help of the Guardia di Finanza to investigate and prosecute cases of tax evasion. It is therefore more than ironic that Como’s Guardia di Finanza ended up investigating its own Agenzia delle Entrate and arresting the Director, Roberto Leoni, and its Head of Legal Office, Stefano La Verde on charges of corruption.
Rotten Apples in Como’s Tax Barrel
The easiest way to establish a system of corruption is to have it initiated and promoted from the very top of the organisation. Roberto Leoni was the Director of the tax office in Como. He actually moved from Como to take over as boss of the Varese office six months before his arrest in July 2019. However by that time he had established a system of corruption alongside other executives such as Stefano La Verde. No doubt he would have instituted a similar corrupt regime in Varese given enough time. But Leoni and La Verde have now been sentenced to four years imprisonment. The Head of Personnel at the Milan tax office was subsequently arrested for advising Leoni that he was under investigation.
One way to become one of the leading groups of accountants in Como was by going well beyond legal tax avoidance advice. For an enhanced fee, the Studio Pennestri could guarantee you the full cooperation of the tax office in accepting a significantly reduced calculation of your tax liabilities. You could also add to your unique selling point by promising to give your clients forewarning of any likely visits from the Guardia di Finanza to check up on your management of VAT receipts, the validity of your invoices or in pursuit of suspected fiscal fraud of any sort. And what about offering a sizeable reduction in any inheritance tax liabilities or any of the other taxes incurred with the sale or purchase of property? Antonio Pennestri and his son Stefano were able to offer all these ‘under the counter’ services thanks to their arrangement with Roberto Leoni who exchanged these favours for envelopes stuffed with bank notes.
Antonio Pennestri was the evil genius behind what has become named the ‘Sistema Pennestri’. It brought many clients to his door aware of the extra-commercial relationship he shared with key players in the Agenzia delle Entrate. Unfortunately, the Guardia di Finanza had become suspicious of these activities. They captured video evidence of the Pennestri handing over cash to Stefano La Verde. Pennestri and son were arrested alongside Leoni in July 2019 with the father now sentenced to over fours years and his son to three years imprisonment.
Antonio Pennestri may well have seen himself and been seen as a respectable member of Como’s elite with his many valuable social and business connections. But this was not the first scandal he had masterminded. In fact Antonio Pennestri has had a string of convictions including a one and a half year spell in prison back in 2013 for authoring the so-called ‘Sistema Comense’.
Antonio Pennestri had always been involved in local sport and was even the President of Comense – Como’s local basketball club which had been at the top of the national Serie A until, under Pennestri’s presidency, it was expelled from the Federazione Italiana Pallacanestro (FIP) and lost its Serie A ranking. Whilst acting as the basketball club’s president, he devised what appeared to be a win-win opportunity for his accountancy clients and for local sports clubs like Comense. The ‘system’ worked like this. He encouraged his commercial clients to make large sponsorship contributions to Comense, from which they gained legitimate tax relief against profits. In exchange, the sporting club would issue false invoices to their sponsors – invoices which were never intended to be paid. The profits of the clients’ businesses would appear to be reduced when the false invoices were added to the company accounts resulting in a further lowering of their tax bills. His clients paid less tax and the sports clubs got their sponsorship.
This scam was uncovered in 2012. Comense was expelled from the FIP and Pennestri was handed down a prison sentence that could not be suspended due to a previous conviction. In spite of this sad history, Comense has subsequently bounced back under new presidency. Once taken back into the Federation, it recovered its reputation and some of its former justifiable sporting prowess.
Antonio Pennestri also bounced back after serving his sentence with his social position not unduly effected by his criminal convictions. He was later appointed the Master of the Como lodge of the freemason organisation, the Grande Oriente D’Italia. This freemason group gained some infamy in the 1990s due to revelations that its P2 lodge managed by Licio Gelli had constructed a shadow state associated with Gladio (an organisation based on the Verga Battalion stationed on Lake Montorfano during the war) ready to spearhead a neo-fascist coup d’etat. There is no evidence that Pennestri had any similar political objectives but he certainly had not given up on his Sistema Comense. In 2019, when the Guardia di Finanza were investigating his newly-minted Sistema Pennestri, they also looked into his attempts to revitalise the Sistema Comense as well as checking on any possible involvement of the freemasons.
Antonio Pennestri is undoubtedly a creative genius and his breathtaking capacity to bounce back socially must be due to a certain charisma tied to boundless energy and self confidence. It’s just a pity he chose to apply these qualities into devising illegal activities .
Three Waves of Arrest
The original arrests back in July 2019 were limited to Roberto Leoni, the then Director of the Agenzia delle Entrate, Stefano La Verde the Agency’s Legal Director and the two accountants – Antonio Pennestri and his son Stefano. These were not people comfortable in spending much time in Bassone, Como’s prison. Their plea bargaining for reduced sentencing soon allowed the authorities to extend their investigations leading to a second round of arrests in May 2020. These included Roberto Colombo, the head of all property-related taxation at the Agency. He admitted he had received his first ‘tangenti’, or illicit cash payment, way back in 2012.
This second wave also netted Roberto Santaniello who had become a form of ‘illicit’ business development manager procuring corruptible accountants and linking them to the appropriate officials in the agency.
The number of those officials was added to in the third wave of arrests in November 2020 with the names of Vincenzo Ferraro, the Agency’s expert on property inheritance tax, and Patrik Orlando, an expert on the taxation of off-shore funds.
The first wave of arrests had cut off the original source of demand with the incarceration of the Pennestris. But this did not stop his studio from continuing the ‘Sistema Pennestri’. Its management was now entrusted within the studio to Simona Secchi who had been instructed to reassure clients that the system would continue to operate in spite of the arrests.
Revelations made by Stefano La Verde in particular also led to the arrest of many more accountants and financial professionals unconnected to the Pennestris. These accountants had been recruited into the scandal by Roberto Santaniello. La Verde’s role was to determine the cost to these clients for whichever illicit service they required. For example La Verde determined that one accountant pay €3000 for the voluntary disclosure of off-shore funds to Patrik Orlando while a similar client was asked to pay €2,000.
The full extent of the spread of this system of corruption was revealed in this last wave of arrests. By now the total number of those charged with corruption amounted to a further fifty two people beyond the eight originally detained in July 2019.
La Verde was the contact inside the Agenzia delle Entrate who calculated the fees for each favour. His testimony revealed how the Sistema Pennestri had developed from a few high value cases originating from a single Como-based accountancy firm into an institutionalised practice of corrupt negotiation with accountants from around the province. It appears as if the ‘business development’ strategy implemented by Roberto Santaniello had been to go for quantity as much as quality with the word going out to financial professionals across the province that tax bills could be negotiated for a fee.
The rate of payment determined by La Verde depended on the number of cases brought by each accountant and their relative worth. Some accountants only sought one or two cases for which they might typically have to pay a tangenti of two to five thousand euro. Massimo Mariangeloni, an accountant from Cernobbio, was atypical in having to pay €34,000 for five higher value cases. He received the judgement of a two year suspended prison sentence typically handed out to most of the second or third wave accountants. However he also had to pay a €29,500 fine.
As far as we know there was no involvement of organised crime in the Como tangentopoli scandal. But it is not hard to see parallels between it and the ‘Nuovo Mondo’ mafia investigation we reported on recently. Both crimes were based on a ‘system’ devised by corrupt accountants. For Nuovo Mondo, the evil genius was Massimiliano Ficarra, a known mafioso. For the Agenzia delle Entrate, the author was the seemingly respectable Antonio Pennestri. Pennestri’s studio was just around the corner from that of Bruno de Benedetto, Ficarro’s trusted financial professional also convicted in the Nuovo Mondo investigation. Pennestri and De Benedetto subsequently became neighbours incarcerated together in the local prison at Bassone. Both systems defrauded the state. Both systems offered unfair competitive advantages to their participants. Both seem to be born out of and sustained by a similar culture of greed and entitlement. Given all this, it does become easier to appreciate how the mafia continue to find it relatively easy to insinuate themselves within sections of the provincial commercial community. With such temptations to criminality emanating from the state’s own fiscal entity, one has to admire the majority of individuals who continue to prefer honesty and integrity no matter at what cost to them individually or to their businesses. The other saving grace arising from this story is the apparent incorruptibility of the Guardia di Finanza – long may it last!