Michele Ferrari leaves a tribunal in Bologna, Italy in 2004 (Image credit: AFP)

Italian newspaper Gazzetta dello Sport has lifted the lid on the financial aspects of the Padua doping investigation, suggesting that Italian and Swiss police have uncovered a huge system of money laundering and fraud linked to a doping ring involving 20 professional riders and athletes from triathlon and biathlon.

The two-page report by experienced journalist Luigi Perna claims that the two-year Padua investigation is the biggest anti-doping investigation in the history of sport, much bigger than Operacion Puerto.

It reveals how Padua public prosecutor Benedetto Roberti carefully followed the money and discovered a series of contracts and secret payments totaling a reported 30 million Euro. It seems that riders avoided paying tax by recycling money via Gibraltar, Monte Carlo, Switzerland and South America.

Gazzetta dello Sport quote from investigation documents that claim Dr. Ferrari was behind the brains behind the plot.

"Along with his son Stefano and the agent Raimondo Scimone, they promoted and created the network," Gazzetta quotes from official documents.

Gazzetta write that bank managers in Switzerland and Monte Carlo were also involved in a scheme that offered a complete package of services, that went from drawing up contracts, coaching and drugs, legal assistance and even the help of doping experts if they tested positive.

As well as phone taps and bank records, Gazzetta says the investigation is apparently backed up by "the searching of riders who worked with Dr. Ferrari: in every occasion doping products (hormones) were discovered, with some of them illegally taken to Switzerland during trips to St. Moritz."

Money laundering

The Italian newspaper suggests that Dr. Ferrari used his training website 53x12.com as a front for his business. He is allegedly under investigation for criminal association, smuggling, the sale, administering and use of doping products, tax avoidance and money laundering. He and Scimone have always denied the accusations, claiming they have never formally been contacted by police in Padua.

"In reality almost all of the money was collected in cash in Italy and Switzerland to avoid paying tax in both countries," Gazzetta writes, quoting from the police documents.

Riders implicated include Michele Scarponi, Denis Menchov, Alexandre Kolobnev, Vladimir Gusev, Vladimir Karpets, Mikhail Ignatiev, Evgeni Petrov and Alberto Ongarato.

Scarponi is cited as an example of the suspicious money movements. He was searched by police before the 2011 Giro d'Italia white training at altitude in Sicily. In 2009 Scarponi was a resident in Italy but had a contract with Gianni Savio's Androni Giocattoli – which at the time was registered in Colombia.

"He managed to deposit and avoid tax on almost his entire earnings by moving the payment via Monte Carlo and then Switzerland, paying just 6% tax," Gazzetta wrote, quoting police documents.

Scarponi has always denied any wrongdoing.

Many riders and team use a tax avoidance scheme on their image rights contracts to limit their exposure to tax. Gazzetta claim that Scimone and the riders worked with a company called T&F Sport Management in Monte Carlo to register image right contracts and avoid tax.

The contracts are apparently not registered with the UCI and the riders pay just six percent tax and then are able to transfer the cash to Switzerland and use it for various activities, including paying Dr. Ferrari for his services. The Italian police have investigated if this has lead to money laundering.

Police have targeted 20 teams from a four-year period and have obtained riders contracts from some of the biggest teams in the sport to compare them to those registered with the UCI. The teams named by Gazzetta are: Liquigas, Lampre, Colnago, Geox, Androni, Katusha, Quick Step, CSF-Inox, Farnese Vini, Acqua & Sapone, Astana, RadioShack, Vacansoleil, Isd, CSF, LPR, Diquigiovanni, Tinkoff, Rabobank, Gerolsteiner and Milram.

Both Italian national champion Franco Pellizotti - who returned to racing this summer with Androni Giocattoli after serving a ban after being caught out by his biological passport data, and Yaroslav Popovych are named as using the system.

Gazzetta dello Sport call the investigation and complex system of suspicious payments a black hole.