Silvio Scaglia, billionaire founder of Swisscom subsidiary Fastweb, and Stefano Mazzitelli, former chief executive of Telecom Italia Sparkle and Gennaro Mokbel, appeared in court on Tuesday for the first hearing for Italy’s major case of tax fraud and money laundering.

The tax avoidance scam allegedly involved the creation of paper companies and invoices for US$2.6 billion of fictitious operations. Only 30 defendants appeared in court on Tuesday. Some of the accused have entered plea bargains while others have opted for a separate judicial process. The defendants were not asked to enter their pleas at this point.

This was Mr Scaglia’s first public appearance since February, when he was arrested on his return to Italy to respond to the accusations against him. Since spending two months in Rome’s Rebibbia prison, Mr Scaglia has been under house arrest. He has been served a rare gag order by judges, allowing him to communicate only with his wife and lawyers.

Mr Scaglia and Mr Mazzitelli deny charges of criminal conspiracy to commit tax fraud. Both broadband companies deny any involvement in the alleged tax fraud scam and claim that they were also victims of fraud.

Judge Bruno Costantini scheduled the next hearing for November 23. He has also ordered that the case should be moved to another section of the Rome courts for procedural reasons.

On the request of several lawyers in the courtroom, the judge decided that nine accused who are currently held in prisons outside the region may be transferred to facilities close to Rome.