De Tomaso’s Chairman Arrested for Misusing Public Funds image

Gian Mario Rossignolo, the chairman of carmaker De Tomaso, and two other men were arrested today, July 12th.

They are accused of misusing 7.5 million euros ($9.2 million) of public funds in a failed turnaround plan. De Tomaso planned to use a former Pininfarina factory, situated near Turin, to manufacture SUVs and sports cars. But the company’s collapse left 1,000 unemployed people and local authorities in the difficulty of reconverting shuttered car factories.

Earlier this year De Toamso filed for bankruptcy after its plan to re-launch production of the Pantera sports car failed due to the lack of financial backing. Several months ago the Turin prosecutors office opened a probe to find out how De Tomaso was making use of public funds. The tax police believe that managers might have used a false bank guarantee to get funds from the Piedmont region and from the European Union. It is believed that some of the money ended in the three men’s accounts.

De Tomaso received public funds of several million euro to re-train its 1,000 workers from January 2012, but the workers have been on temporary layoff since 2010. Rossignolo, the head of De Tomaso’s human resources office, and a financial intermediary are now under house arrest.