Italian police seize more than $131 million from Amazon on tax fraud, worker exploitation allegations

By Ahmet Gencturk

ATHENS (AA) - Italian police seized €121 million ($131.32 million) from Amazon on allegations of tax fraud and worker exploitation, a media report said Tuesday.

The seizure concerns the alleged use of so-called labor reservoirs - a system where large companies illegally subcontract logistics services to other firms and cooperatives to cut labor costs and pay less taxes, according to the state-run ANSA news agency.

How the seizure was made was not disclosed.

More specifically, prosecutors in the northern industrial city of Milan argued that many of the cooperatives used by Amazon systematically failed to pay VAT, pension and Social Security contributions.

A complex tax fraud was being committed via an "illegal mechanism of invoices for operations that legally do not exist regarding the drawing up of sub-contracts for labor,” said prosecutors.

“We comply with all applicable laws and regulations in every country in which we operate, and we demand that companies that work with us do the same,” Amazon said in response.

Milan prosecutors have opened more than a dozen similar investigations into companies, including DHL, GLS, Uber, Lidl, BRT, Geodis, Esselunga, Securitalia, UPS, Carrefour group and GXO, the latter of which had €84 million seized July 2.