In the early hours of 7 July 1997, Federico Scotta and his wife were woken by an incessant ringing of their doorbell. Police had arrived at their home in Mirandola, a town in Italy’s Emilia-Romagna region, with a search warrant.

Officers found nothing incriminating, but the couple and their three-year-old daughter and baby son were escorted to the police station. The children were taken away by social workers that day and a few months later a third child was taken from the delivery room. The couple never saw the children again.

The so-called “Satanic panic” phenomenon that had swept through the US and parts of the UK earlier that decade had reached Italy. Scotta and his wife were accused of belonging to a sprawling paedophile network that worshipped the devil and sacrificed children and animals in cemeteries at night.

As with cases beyond Italy, the outlandish claims were never substantiated but several people were convicted and 16 children were removed from their parents. The ramifications destroyed families. One mother killed herself while a priest, Giorgio Govoni, died of a heart attack in his lawyer’s office after learning that prosecutors wanted him jailed for 14 years.

Scotta’s wife was acquitted but he was jailed for more than eight years in a case labelled by the Italian press as “the devils of Lower Modena” in a reference to the area’s two embroiled towns, Mirandola and Massa Finalese.

More than 20 years later, a review of Scotta’s case began at Ancona’s appeals court this week after an investigation by an author and journalist, Pablo Trincia, claimed that children caught up in the sweep, who were all from deprived families living under the radar of social services, were manipulated by officials into making accusations.

“I have always proclaimed my innocence and need this sleazy and ugly stain of being called a paedophile to be removed,” Scotta told the Guardian.

Trincia’s research for his book about the case, Veleno, led him to the person who began the story, known as Dario. At the age of six, oscillating between his parents who were struggling to make ends meet and a foster family, Dario accused his parents, older brother and, indirectly, Scotta, of sexual abuse.

Govoni, a respected priest in Massa Finalese, was accused of gathering children and, dressed in a hooded white tunic, leading them to the local cemetery for satanic rituals. Govoni was acquitted postmortem.

“The first thing Dario said was: ‘I don’t know if I told the truth as there were all these social workers, they manipulate you,’” Trincia explained.

Dario’s allegations emerged a few months into meetings with a psychologist. “His background was troubled,” Trincia said. “Years later it was discovered that the names he was coming up with were names of his schoolmates, so he was mixing things up. But the psychologist and Modena prosecutor believed there must be a paedophile ring.”

As the psychologist probed further, she assumed that one of the people Dario was referring to was Scotta. “She made connections as these families were under social services,” Trincia said.

On the same night police visited Scotta they also searched the home of a neighbour, a single mother called Francesca. Her eight-year old daughter, Marta, was taken from her and sent to live in a home run by nuns. A few months into therapy with the same psychologist, Marta started to accuse Scotta of sexual abuse. Francesca, also implicated, killed herself after being put under house arrest when she went home to give her child a teddy bear.

Marta is a key witness in the new judicial process. “She said they made her accuse Scotta and say that her mother was evil,” said Trincia.

The only evidence that led to nine convictions were the children’s allegations made to the same psychologist and claims from one gynaecologist that they had been raped, despite other medics disputing this.

“This case has caused so much destruction and death,” said Patrizia Micai, the lawyer pursuing the review. “We need to establish the absolute truth. Social services have never taken responsibility, always maintaining that the courts were responsible.”

Giuliana Mazzoni, a psychology professor at Rome’s Sapienza University, said: “The children were taken at an early age and raised with the single idea that their parents abused them. As young adults it would be very difficult for them to switch to an alternative reality.”

Some names have been changed