Under a community aid scheme, producer organizations that deliver grapefruit, oranges, mandarins or clementines fruit grown in the EU for processing into juice on the basis of a contract are entitled to receive aid. The detection of the alleged scam comes at a time when the EU is in the process of reforming the Common Market Organisation (CMO) for fruit and vegetables - which is currently based partly on providing support to producers on the basis of quantity delivered to the processing industry - and instead transferring to a single payment scheme. The public prosecutor's office in Palmi, Calabria, said this week that 45 suspects have been arrested in the alleged fraud case, following a joint investigation by OLAF and the Carabinieri (Italian police) that has been on-going since 2005. The Carabinieri were first alerted to possible irregularities for the marketing years 2000/1 and 2002/3, in the undertakings of several Calabrian fruit producer associations and processing companies. "In the course of the investigation it emerged that most, if not all of the fruit supposedly consigned by the producer organisations in question to the processors were fictitious and hence the processed product," said OLF, "ie the concentrated juice supposedly sold by the firms and upon which Community aid was claimed and paid, was equally non-existent." OLAF checked out the existence of juice processing and declared destinations of fruit juice - many of which were said to be in Spain and France. But spot checks found that declared addresses actually related to premises that have nothing to do with the fruit industry at all - including a museum, a car park, a hardware store, and apartment blocks. "OLAF in partnership with its Italian colleagues has reached the conclusion that all the transactions relating to France and Spain in particular as listed in the accounts of the Italian operators involved were totally non existent." In its most recent annual report published last July, OLAF said it detected 12,076 cases of fraud or irregularity on the use of the EU's funds amounting to €1.42bn in 2005. The statistics represented an increase of 28 per cent in the number of cases and of six per cent in the amounts involved. Of that amount OLAF reported €102m worth of "irregularities" in 2005 related to agricultural subsidies, a rise of 24 per cent compared to the €82m detected in 2004.