Parmalat fraud case

A court in Italy has sentenced the former head of the Parmalat food conglomerate to 18 years in prison in one of Europe's biggest ever fraud cases.

Calisto Tanzi, who was also Parmalat's chief executive, was found guilty on charges of fraudulent bankruptcy and criminal conspiracy in the main trial in the northern Italian town of Parma in connection with the scandal dubbed "Europe's Enron," in reference to the former firm at the center of the largest corporate collapse in US history.

Tanzi maintained his innocence throughout the case. His attorney, Giampiero Biancolella, said his client would appeal the verdict.

Prosecutors had asked the court for a 20-year sentence for the 72-year-old Tanzi over the scandal at the corporation which left a 14-billion-euro ($19 billion) hole in the company's books, and led to 135,000 people losing their savings.

Tanzi had already been sentenced to 10 years in prison for stock market manipulation in a separate trial.

The prosecution also asked for prison sentences for 16 other defendants including 12 years for Tanzi's brother Giovanni, and nine and a half years for Fausto Tonna, the group's former financial director.

At the time of its collapse, Parmalat employed around 36,000 people in 30 countries and was one of the leaders in the Italian business world. At the time, the corporate failure was Europe's biggest.

The food company specialized in UHT (Ultra High Temperature) milk and daily products.

However, in December 2003 it emerged that the company had a multi-billion-euro hole in its financing, and had been in trouble for many years. The company's financial woes had been covered up by major falsifications of balance sheets and sophisticated financial fiddling.

"Parmalat was the symbol of a sick system and the biggest debt factory of European capitalism," investigator Lucia Russo said during the trial.

Author: Darren Mara (AFP, AP)
Editor: Susan Houlton