BT Execs Knew of $339 Million Italy Fraud, Prosecutors Say
(Bloomberg) -- Milan prosecutors say former executives at BT Group Plc were aware its Italian unit hid 300 million euros ($339 million) of losses and inflated revenue by producing fictitious invoices, according to a court document.
Luis Alvarez, Richard Cameron and Corrado Sciolla are among 23 people accused of involvement in the scandal that emerged in 2016 after an internal investigation, the document showed. The fraud led to a 513 million-pound ($661 million) writedown at BT’s IT consulting arm Global Services, which is now shedding assets and cutting thousands of jobs.
The allegations include concocting about 57 million euros of false invoices, according to the document. The prosecutors also linked BT’s auditor at the time, PricewaterhouseCoopers, to the events, alleging that Andrea Alessandri, a PwC manager in charge of auditing BT Italia’s accounts, falsified its audit.
The suspects were named following an official notification that a probe by financial police in Milan has concluded. Prosecutors will now consider filing requests for indictments after giving the 23 people time to respond.
A lawyer for Alvarez and Cameron, the former chief executive and chief financial officer of BT Global Services, and Sciolla, BT’s former European head, didn’t return calls for comment. A representative for PwC had no immediate comment and Alessandri’s lawyer could not immediately be reached.
“It would be inappropriate to comment on an ongoing criminal investigation,” a BT spokesperson said.
BT pushed out Sciolla and dropped PwC after the scandal, which came as BT CEO Gavin Patterson sparred with U.K. regulators over fiber spending and the independence of BT’s network business, Openreach. Patterson’s successor Philip Jansen took over this month.
The British phone company is trying to sell the Italian unit and has secured a non-binding bid from Telecom Italia SpA, people familiar with the matter said in January.
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