Amazon under fire for alleged fraud scheme worth hundreds of millions: 'Trojan horse'

An investigation into Amazon's operations in Italy has led to allegations that it has colluded with Chinese partners to commit hundreds of millions of dollars' worth of customs and tax fraud.

What's happening?

As Reuters reported, Amazon allegedly acted as a "Trojan horse," importing Chinese goods without paying the appropriate customs fees and sales taxes. 

The scheme could involve not just Italy but potentially the entire European Union, and as many as half a million products may be implicated.

This scheme is just one new line of inquiry that was raised as part of a larger 1.2 billion euros ($1.4 billion) investigation into a tax evasion case.

Why is this tax evasion concerning?

For European residents, Amazon's possible shady dealings are a big issue. If the allegations are true, then the company or some party within the company is enriching itself by stealing what should be public funds. 

The entire community suffers when taxes are not paid, as a variety of public programs receive less funding.

Meanwhile, tensions over taxes and customs fees are stirring up trouble between Europe and the U.S., Reuters reported.

Amazon already places a major burden on the world with its operations. Its shipping and packaging create a great deal of pollution and waste, and while it has made some effort to curb its impact on the environment, it has walked back its most ambitious climate pledges, seeming more interested in a green image than green actions.

What's being done about Amazon's potential fraud?

On November 24, Italian police raided two Amazon sites as part of their ongoing investigation. At a logistics hub in Cividate al Piano, officers from the Guardia di Finanza and the customs agency seized around 5,000 products, including toys, cell phone covers, air fryers, pens, and scissors.

At the company's Italian headquarters in Milan, they found the manager responsible for the alleged fraud within Italy and seized IT equipment.

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