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Italy’s Push to Create Greener Cities Led to $5 Billion in Fraud

Generous government incentives were snapped up by scammers and may have created a construction bubble.

Scaffolding surrounding residential building sites in Rome, on Feb. 21.

Scaffolding surrounding residential building sites in Rome, on Feb. 21.

Photographer: Alessia Pierdomenico/Bloomberg

Rome, Milan and cities across Italy have become clogged with scaffolding after real-estate owners rushed to tap generous government programs to fund energy-efficiency renovations. 

The problem is many were scammers. Instead of paying for improved insulation, draft-free windows and cleaner boilers, part of the state support ended up funding investment in cryptocurrencies, gold and other assets, according to Italian officials.