Pietro Romano, or “Pedro the Roman” as his English banking chums teasingly called him, was temporarily based in London in charge of the European loans and leveraged finance department for the Banca di Credito Sardo. It was a great job – £250,000 a year plus bonuses – made all the more attractive because Pedro paid, or rather didn’t pay, Italian tax.
In truth, he wasn’t alone. The taxpaying habits of Italians had been much in the news of late, as prime minister Mario Monti’s government attempted to recover some of the country’s lost tax billions to bring down its €1.9 trillion debt. One news outlet reported that only 72,000 Italians – less than 2 per cent of all taxpayers – declared a gross annual income of more than €200,000.
Pietro “Pedro” Romano was not among these. The Italian taxman was led to believe, on the basis of Pedro’s skilfully written returns, that the banker was scraping by in Britain with little more to his name than a few tins of spag bol. The authorities knew nothing of his four-bedroom flat in Notting Hill Gate, the English private-school education for his children, his vintage Alfa Romeo Spider or even of his powerboat berthed in La Spezia harbour on the Ligurian coast.
Pedro’s 1989 Riva Aquarama Special was his great love. The 32ft varnished mahogany yacht with its chrome trim and twin V-8 Riva engines had cost him close to €400,000 seven years previously. In those days, before Lehman Brothers, before the recession and in particular before the eurozone crisis, it had seemed a great investment. It was a classic boat – the Ferrari of the seas – and when he came to sell it he knew that, unlike most second-hand boats, it would turn a profit.
However, Pedro had no intention of ever getting rid of his glorious launch. Every summer he would rent a house on the northern Italian coast where he spent his days pottering in the Riva with his friend Antonio Bianchi, who owned a similar sort of boat, and members of his extended family from Turin. The highlight of this annual holiday was to cruise into Portofino for an alfresco harbour-side lunch where he and Antonio would watch the tourists gawp admiringly at their elegant yachts.
Back in Britain, however, things were less sunny. The economic downturn had not been good for Pedro. His bonuses were not what they had been and his spending, which had once matched his earnings, now outstripped his income. Finding the wherewithal to keep his well-heeled world turning was getting harder and harder, and the Riva, he knew, was now a luxury that he could ill afford, especially as in December the newly appointed Italian government had introduced new tax revenues on luxury assets, in particular powerboats and yachts. The tax, calculated on a daily basis, would cost Pedro thousands of euros, and if he didn’t pay up there were penalties of up to 300 per cent.
But getting rid of the Riva was not an option. Pedro was as emotionally attached to it as he was to his mother’s tomato sauce and his beloved Juventus football team. And so he hung onto it.
In May, the Italian authorities took another draconian step to claw back tax by raiding the marina at La Spezia and making checks on the ownership of all the yachts moored there. They found a €1.5m yacht owned by a businessman who had never filed a tax return, and scores of others whose owners claimed to earn less than their crew. When they came to Pedro’s Riva they discovered that it was owned by a phantom company which had been created by the banker, and that had never declared an annual revenue of more than €1,296.
In desperation Pedro flew to La Spezia to see if he could prevent the impounding of his boat. As he strode along the deserted pontoon to where the floating love of his life was berthed, he saw his friend Antonio crying.
“What’s the matter?” said Pedro. Antonio pointed, between sobs, to his own yacht, which Pedro now saw had flames bursting from the cabin.
“It was the only thing I could do,” blurted Antonio. “Better to get the insurance money than to let the stinking taxman have it.”