20 teams, dozens of riders and €30m - the Italian doping inquiry "bigger than Operacion Puerto"

Riiders belonging to up to 20 teams are said to be involved in what prosecutors in Italy believe is a €30 million doping ring organised on an institutional scale, with banned doctor Michele Ferrari at the heart of it. The Gazzetta dello Sport says that the inquiry, based in Padova, is “the biggest antidoping investigation in the history of the sport, well beyond Operacion Puerto.”

The news comes as cycling continues to come to terms with the fallout from the Lance Armstrong affair, with new allegations surfacing daily – although the scale of the allegations emerging from Italy suggest that may end up being seen as a mere antipasto to the main course currently being prepared.

As a result, it looks certain that the sport will have to brace itself for a fresh wave of damaging headlines - the Gazzetta dello Sport says it could be a 'tsunami' - centred on a banned physician who insists he only provides advice such as training plans, and the clandestine movement of millions of euros between bank accounts in Switzerland, Monaco and elsewhere.

The print edition of the Italian sports daily today features a two page spread under the headline ‘Il sistema Ferrari’ – ‘The Ferrari system’ – which details how investigators working since 2010 under the guidance of magistrate Benedetto Roberti have uncovered a international web of illegal payments worth an estimated €30 million surrounding a doping ring allegedly orchestrated by Ferrari.

According to investigators, dozens of riders are implicated, with Michele Scarponi, Alexander Kolobnev and Dennis Menchov among those named. The Gazzetta article gives the impression that this is not just a case of individuals allegedly breaking the rules without the knowledge of their management – entire teams are said to be involved, with the Gazzetta dello Sport specifically naming Astana, Lampre, Liquigas, Rabobank, RadioShack and Vacansoleil, among others.

In all, riders belonging to 20 teams are said to be involved, and according to the newspaper, Swiss police have visited the offices of the UCI’s accountants to obtain copies of image rights contracts for all riders registered with those teams between 2008 and 2011.

It is not clear whether all, or indeed any, of the teams themselves are formerly implicated or whether it is simply a case of checking each individual rider contract to ensure nothing untoward has gone on.

Image rights are not in themselves illegal. Riders’ team salaries will partly be paid as regular income, attracting income tax as a result, but mainly as image rights, typically taxed at a lower rate, especially if paid into a bank account in a country with a benevolent tax regime such as Luxembourg.

What is illegal, though, is not to declare the full extent of those payments, which is what prosecutors believe has happened in the case of the teams and riders they are investigating, with the Gazzetta dello Sport’s article showing a reconstruction of how investigators believe Ferrari’s operation was financed.

It is claimed that two image rights contracts were drawn up for each rider involved, one of them false and in a lower amount than was actually the case, which would be deposited with the UCI in accordance with its rules.

The rider would pass on the second, hidden, image rights contract to a Monaco-based company, T&F, which would sell it back to the rider’s team at an inflated price and keep 6 per cent of the sum involved.

T&F would pay the remaining 94 per cent into current accounts at the Banca Svizzera Italiana that all the riders involved in the ‘Ferrari system,’ at least those with teams based or registered outside Italy, were required to have.

Riders would then make payment from that account to Ferrari for the services he provided into one of two accounts held by the doctor in Swiss banks.

Besides actual bank transfers, money is said to have been moved clandestinely using what are described as more traditional methods, such as in a briefcase driven across the Swiss border in the boot of hired cars.

Potential charges go well beyond disciplinary measures that may be instituted by sporting authorities, and could include ones relating to tax evasion and money laundering.

Nor is it just cyclists who are said to be involved.

Olympic champion walker Alex Schwazer, favourite to defend his 50km walk title in London this summer until testing positive for EPO, as well as athletes in sports such as biathlon and triathlon, are among those said to have visited Ferrari at a rented apartment in St Moritz that investigators believe to be the base of his operation.

There, they say, Ferrari’s clients were offered a “complete package” of services including physical and pharmacological preparation and even legal assistance in the event of a positive test or doping investigation, all with the aim of artificially enhancing the athlete’s performance. 

As well as Ferrari, the Gazzetta dello Sport reports that others implicated include his son Stefano, who runs his father’s 53x12 website, sports lawyer Raimondo Scimone, and officials connected to various Swiss banks involved in the investigation.

Riders licensed by the Italian cycling federation, the FCI, and UCI licence holders riding within Italy, have been forbidden from associating with Ferrari since February 2002. Last month, Filippo Pozzato received a three-month ban after admitting going to Ferrari for advice on training.

In July, Ferrari was given his second lifetime ban, this time by USADA and in contrast to the Italian one, applying worldwide, for his role in the USPS doping conspiracy after he chose not to contest its charges through arbitration.

He was the subject of a number of specific allegations in the Reasoned Decision published in connection with Armstrong, which he has strongly refuted on his website.

The Padova investigation is separate to another one being conducted from Mantova which focus on the Lampre team, although there is clearly some overlap and co-operation between the two.