Article: CIGARETTE MAKER ACCUSED OF EVADING TAXES Italy probing Philip Morris in fraud case

Italian tax fraud experts were investigating claims Friday that U.S. tobacco giant Philip Morris Co. Inc. took part in a $6.4 billion tax evasion scheme.

The case is being led by investigators in Naples but it could spread to other cities in Italy as officials investigate the company's business arrangements with distributors.

Naples prosecutors say Philip Morris unfairly took advantage of lower tax rates reserved for companies without a direct Italian subsidiary. They alleged that Intertaba, set up to distribute Philip Morris brands, was not an independent franchise but was controlled by the New York-based conglomerate.

Philip Morris, whose brands include Marlboro and Merit, holds 46% ...

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