People were reportedly paying 10,000 euros ($10,600) for travel visas that should have cost 90 euros. Visas were also granted to some people who were deemed a security risk by other countries.
Italy on Tuesday asked prosecutors to open an investigation after it dismissed a consulate official in Irbil, the Kurdish regional capital in Iraq, over reports of exorbitant fees being charged for travel visas.
The foreign ministry issued a statement saying that its own investigation had found "irregularities" in the granting of more than 150 visas to Syrians as well as Arab and Kurdish Iraqis.
The probe found that people were obliged to pay 10,000 euros instead of 90 euros, for travel visas to the European Union's Schengen Zone - an area that covers most of the European Union.
The Italian newspaper "Corriere della Sera" which broke the story on Tuesday also reported that visas had been granted to some people who had been refused the travel pass from other European countries because of security fears. The foreign ministry statement gave no details but said "it is obvious that measures will be taken". It said the head of the visa section in Erbil, who was not named, had been "relieved of his duties."
bik/jm (AP, Reuters, AFP, dpa)