Meran, Italy – Financial police in Meran have uncovered a multi-million euro fraud involving a property falsely declared as subsidized housing and illegally used as a luxury bed and breakfast. The investigation, which began in early February 2026, centers on allegations that developers exploited Italy’s affordable housing programs to generate illicit profits.
The scheme involved misrepresenting a residential building intended for subsidized rental as a qualifying project for government funding. Once approved, the developers allegedly converted the units into high-end tourist accommodations, charging rates significantly above market value for comparable rentals. Authorities estimate the fraudulent gains to be in the millions of euros.
The investigation was prompted by a tip-off regarding discrepancies in the building’s usage and reported income. Financial police initiated a review of building permits, rental agreements, and financial records, revealing a pattern of falsified documentation and concealed revenue streams.
According to sources within the Finanzpolizei, the operation involved a complex network of shell companies designed to obscure the true ownership and financial beneficiaries of the scheme. Investigators are currently tracing funds transferred to offshore accounts, with a focus on identifying individuals and entities involved in money laundering activities.
The case echoes a separate, unrelated investigation concluded in October 2025, where the Finanzpolizei arrested a 68-year-old man at the Brenner Pass attempting to depart the country. He was wanted in connection with a “asphalt fraud” scheme involving a transnational group primarily comprised of British and Irish nationals, led by an Italian citizen. That operation, which began in February 2023 under the direction of the Bozen Public Prosecutor’s Office, revealed a network that defrauded individuals and small businesses in South Tyrol by offering asphalt paving services at drastically reduced prices, using substandard materials, and avoiding tax obligations. The group allegedly generated approximately 9 million euros in illegal profits.
The Finanzpolizei’s mandate, as outlined by the Austrian Federal Ministry of Finance, includes combating tax evasion, social welfare fraud, organized illegal economic activity, and illegal gambling. The agency’s powers include unannounced inspections and the authority to demand the production of financial records.
In a separate, but contemporaneous case, the Finanzpolizei recently uncovered a fraud involving the misuse of Italy’s National Recovery and Resilience Plan (Pnrr). Twenty-two businesses in South Tyrol are under investigation for allegedly misappropriating approximately 10 million euros in state funds. Details of this case remain limited as the investigation is ongoing.
Authorities have not yet released the names of those implicated in the Meran housing fraud, citing the ongoing nature of the investigation. A spokesperson for the Finanzpolizei stated that further arrests are anticipated as the investigation progresses. The building in question has been temporarily sealed off pending a full forensic audit and the completion of the criminal investigation. No date has been set for the resumption of normal operations at the property.
