Investors bought about $1.1 billion in private bonds backed by Italy's most powerful Mafia over 4 years

• International investors bought private bonds backed by Italy's most powerful organized crime group from 2015 to 2019, the Financial Times reported on Tuesday.
• Pension funds, hedge funds, family offices, and a private Italian bank bought about €1 billion ($1.1 billion) worth of the debt, the newspaper reported.
• In one deal, investors bought bonds linked to assets sold by organized criminals who were charged with stealing millions from the European Union, the report said.
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From 2015 to 2019, international investors bought €1 billion, or about $1.1 billion, worth of bonds backed by the earnings of Italy's most powerful Mafia, the Financial Times reported on Tuesday, citing market participants.

The debt was backed by front companies that were linked to southern Italy's 'Ndrangheta group, the report said. It added that "the bonds were created out of unpaid invoices to Italian public health authorities from companies providing them with medical services."

Banca Generali, a private Italian bank, purchased some of these bonds in consultation with EY, the Financial Times said.

"Banca Generali and Banca Generali Fund Management Luxembourg are getting to know right now of the mentioned bad news," the bank told the newspaper, adding that it relied "on the notion that the transaction was eligible" when it made the purchase. EY declined to comment to the Financial Times.

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Pension funds, hedge funds, and family offices that aimed to generate money from record-low interest rates also bought the bonds, according to the report.

The Financial Times said that in one of the deals, institutional investors bought bonds tied to assets sold by a refugee camp in Calabria that organized criminals had overtaken; they were later convicted of stealing tens of millions of euros of European Union funds.

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The newspaper described the 'Ndrangheta's empire of money-laundering and drug-trafficking operations as less well known than the Sicilian Mafia.

But its steady rise has made it "one of the wealthiest and most feared criminal groups" in the West, the Financial Times said, adding that Europol has estimated its combined turnover at €44 billion a year.

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