Italian police said Wednesday they have busted a major operation to defraud a government scheme to help businesses during the coronavirus pandemic, recovering more than €400 million.

Twelve people were arrested as part of the sting against a criminal network based in Rimini, northern Italy, which defrauded the Italian state of a total of €440 million, the financial crimes police said.

Some 97% of this has been recovered, police said, from property to vehicles and cryptocurrencies - as well as gold, platinum and luxury watches held in a safe deposit box in Austria, which cooperated with the operation.

"The organised crime group used Italian companies to sell false tax credits, to simulate business leases to obtain COVID-19-related compensation, and to simulate tax credits for false works to improve the safety and energy consumption of the companies," explained EU agency Eurojust, which helped with cross-border issues.

European Union countries including Italy spent billions of euros helping businesses when the arrival of coronavirus in early 2020 triggered widespread shutdowns across the economy.

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