A Glasgow firm set up by alleged Italian mafia money-launderers will be shut down with the loss of more than £7m in tax.

Liquidators say they have unable to recover any cash from Trustcom Ltd, part of the business empire of Michele Scognamiglio, the man the Naples press has dubbed “the wizard of recycling”.

The company will now be dissolved as prosecutors across Europe continue their investigation in to a suspected €2 billion scheme to clean dirty money for organised crime groups and tax evaders.

Scognamiglio and fellow Trustcom director Marco Spinola were arrested in Italy in late February in an international police operation overseen by Eurojust, the EU’s agency for criminal justice cooperation.

They have been accused of using a Latvian e-money provider called Trustcom Financial UAB to launder money. Half of their clients are believe to be Italian and include  people connected to the Cosa Nostra, Camorra and 'ndrangheta crime gangs.

It is not clear what - if any - relationship the Scottish company Trustcom Ltd had to the similar named Latvian institution. 

Liquidator Alistair McAlinden of Interpath Advisory, has now completed a final report in to the company, which will now be dissolved. In official filings he says he has been unable to find any funds to pay off creditors, most notably HMRC.

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“No assets belonging to the Company have been identified,” he wrote. “We do not consider there to be any assets to be realised.” 

Later McAlinden added: “HMRC had a substantial claim in relation to unpaid VAT. There were no funds to allow a dividend to the secondary preferential creditor.  There were no funds available to make a distribution to unsecured creditors during the liquidation.”

It was HMRC which initiated bankruptcy proceedings against Trustcom. In previous reports McAlinden said unpaid VAT amounted to £4.7m. Under bankruptcy rules this makes HMRC a secondary preferential creditor - next in line for money after employees. There was another unsecured debt of £2.9m, believed to be unpaid corporation tax. Total debts were therefore £7.6m.

McAlinden, who did not wish to comment on his report, tried unsuccessfully to contact Scognamiglio and Spinola, who used addresses in both Latvia and Lithuania. 

He has now sent a secret report on the directors of the company to the British government’s business department.

In its last micro company accounts, signed by Scognamiglio, Trustcom Ltd, was valued at just £300,000. The VAT debt, however, suggests large sums were passing through its accounts. 

The company - like thousands of other shell and real firms - had been officially headquartered at a virtual office and mail box drop in central Glasgow.

Scognamiglio and Spinola, originally from Campania and Puglia respectively, were also listed as the persons of significant control of a now dissolved Scottish limited partnership or SLP. Its base was officially in a former drapery store in Douglas, South Lanarkshire, that has also been used by thousands of shell firms, including those used in previous money-laundering schemes. 

EuroJust in February said said the arrests were the results of “concerted action” by law enforcement agencies in Italy, Latvia and Lithuania.

The agency added: “Since 2017, an estimated €2 billion has been laundered by two main suspects via a worldwide web of shell companies. The suspects, who now have been detained, offered money laundering online as a service to criminals.”

It continued: “The financial institution offered money laundering as a service to thousands of criminals across the EU, by making fictitious financial transactions via the web of enterprises, which were run by strawmen.

“It advertised its alleged consultancy services online and was set up in Lithuania in 2016 by an Italian-based organised crime group (OCG).

“The financial institution was led by the two main suspects, who resided in Lithuania and Latvia. The OCG laundered the proceedings of a range of criminal activities, including tax evasion, cyber fraud, fake bankruptcy and organised crime such as drug trafficking.

“Part of the proceeds were injected into the Latvian and Lithuanian economies via the purchase of real estate and luxury vehicles.”

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EuroJust did not name Scognamiglio or Spinola or Trustcom Financial UAB. Italian authorities, however, did so.

One of the many individuals under investigation in Italy for using the alleged scheme is a son of the boss of the Santapaola mafia clan from Sicily, according to the Italian wire agency Ansa. The man, who has not been named, has no criminal convictions 

Benedetto or Nitto Santapaolo - currently  in his 80s and in prison  - is considered one of the most dangerous and bloody leaders of the Cosa Nostra.

His clan, with fresh leadership, still preys on the Sicilian city of Catania.

The Cronache della Campania newspaper, citing the special financial police Guarda di Finanza, added that Scognamiglio, Spinola and their associates also provided services to the Casalesi clan of the Camorra, the main Naples organised crime gang, and the Calabrian mafia, the ‘ndrangheta.

The Lithuanian central bank stripped Trustcom Financial UAB of its e-money institution licence in March 2022, saying the institution “may have organised money laundering and no longer meet the statutory requirements of good repute”. Bankruptcy proceedings were opened.

Trustcom Ltd went in to liquidation in November 2022 after a winding-up petition by HMRC a month earlier.

Trustcom Ltd in filings to Companies House described itself as being involved “information servives” and “activities of financial services holding companies”.

Scognamiglio, who is around 51, on his LinkedIn profile describes himself as a tax haven consultant.