International investors reportedly bought bonds backed by the Italian mafia

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The logo of the Italian banking company Banca Generali listed in the MIB in Milan is seen on a screen. In the background there is a colorful stock exchange price performance.

Alexander Pohl | NurPhoto | Getty Images

Investors around the globe were buying bonds backed by a notorious mafia in Italy for four years, The Financial Times reported, citing financial and legal documents.

The report said an estimated €1 billion in private bonds backed by front companies charged with working for the Calabrian ‘Ndrangheta mafia group were bought by global investors between 2015 and 2019.

These bonds were bought by pension funds, hedge funds, family offices as well as Banca Generali — one of the biggest private banks in Europe — the FT reported. The Italian bank purchased those bonds through an instrument constructed by Geneva-base investment bank CFE, the newspaper said.

These bonds, according to the FT, were created out of unpaid invoices to public health authorities in Italy from companies providing medical services. One debt deal, which was purchased by institutional investors, contained assets sold by a refugee camp in Italy’s Calabria region.

CFE said it did not knowingly buy assets linked to criminal activity. Banca Generali told the newspaper it was “getting to know right now of the mentioned bad news.”

Click here to read the full FT report.

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