Italian prosecutors seek trial for BT Italy, former executives in fraud case

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By Emilio Parodi

MILAN (Reuters) – Milan prosecutors investigating an accounting scandal at the Italian unit of British Telecom have asked for the unit and 23 defendants, including three former top executives, to be sent to trial, three people with knowledge of the case said on Tuesday.

The sources said the document filed by prosecutors, requesting a Milan judge to order a trial, alleges that a network of individuals in BT Italy exaggerated revenues, faked contract renewals and invoices and invented bogus supplier transactions in order to disguise the unit’s true financial performance.

One of the three sources said the judge had scheduled a preliminary hearing in mid-December, at the end of which she will decide whether to put BT Group PLC’s (L:) Italian unit and the defendants on trial on charges of false accounting, issuing invoices for fictitious operations and fraud in public procurement, or whether to dismiss the case.

A spokesperson for British Telecom declined to comment. “We have not yet had formal notification as to what charges the Milan prosecutor has asked the Court to lay and against whom. Given that, it would be inappropriate to comment on an ongoing investigation,” he said in an emailed statement.

In the past, the company has stated that it cooperated with the Italy judicial authority and believed it was the “offended party” of the accounting irregularities in Italy.

The scandal required the company to take a 530 million pound charge in early 2017. For a timeline, click on.

Milan prosecutors wrapped up their preliminary investigation last February, for the first time naming three group executives, all of whom have since left BT, as well as BT Italy itself, among an expanded list of 23 suspects.

Prosecutors cited Luis Alvarez and Richard Cameron, respectively former chief executive and former chief financial officer of BT Global Services, and Corrado Sciolla, formerly BT’s head of continental Europe, as suspects of complicity in false accounting. A tax police report included in prosecutors’ investigation alleged that top BT employees were at the heart of the problem.

Giuseppe Iannaccone, a lawyer for Sciolla, said he was “totally confident that the trial will prove the absolute innocence” of his client. A lawyer for Alvarez declined to comment and one for Cameron did not respond to a request for comment.

All the defendants have always denied any wrongdoing.

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