MILAN (Reuters) -Italy's finance police on Thursday seized around 86.5 million euros ($94.5 million) from the Italian arm of U.S. package delivery company United Parcel Service (NYSE:UPS) over alleged tax fraud and illegal labour practices.
Milan prosecutors and the Guardia di Finanza tax police said in a statement they had sequestered the money from "a leading logistics company". The seizure order seen by Reuters identified the company as UPS.
"We understand the prosecutor's concerns, and we have policies and processes in our compliance program specifically addressing them," UPS said in an emailed statement, adding that it complies with all local laws and regulations and is fully cooperating with the authorities.
"A complex tax fraud was uncovered, characterised by the use of invoices for non-existent transactions and ... fictitious labour contracts," the prosecutors and police said in their statement.
The 94-page seizure order said prosecutors suspected that from 2017 to 2022 UPS's Italian unit was in practice acting as the direct employer of some 8,500 workers who were formally employed by cooperative labour contractor companies.
UPS software "teleguided" the workers in their daily tasks through digital devices that they carried on their person, the order said.
UPS officially has only 1,000 employees in Italy.
The prosecutors also asked a judge to ban UPS Italia from advertising for a year, the order showed.
The police and prosecutors' statement said searches were underway at the company and three of its executives were under investigation.
The probe is similar to others conducted recently against other players in the logistics market in Italy, the statement also said.
($1 = 0.9156 euros)