By Steve Scherer
ROME (Reuters) - A mafia clan in southern Italy staged hundreds of fake car crashes every year to get millions of euros in insurance payouts to buy drugs and weapons, police said on Friday.
The insurance fraud was just one of the charges against 70 people sought for arrest in dawn raids by police on Friday in the Calabrian city of Lamezia Terme, near the "toe" of Italy.
"The insurance scam permitted the boss to manage his clan, to buy guns and drugs, and to pay his men," Rodolfo Ruperti, head of the police squad that carried out the investigation, told Reuters.
The mob had local insurers, doctors, lawyers and auto body repairers on the payroll to pull off the fraud which earned the gang well over a million euros ($1.3 million) a year, Ruperti said. Police seized assets worth 1.2 million euros.
The defrauded insurer was a local branch of Zurich Insurance Group, which operated independently, under license from the head office in Switzerland.
"Zurich does not comment on ongoing investigations and legal proceedings," the Swiss group said in an email.
The insurance hoax was just one of the crimes the mafia gang is suspected of. Boss Giuseppe Giampa, 32, extorted protection money from local businesses and sold the clan's votes to the highest bidder in a 2010 mayoral vote, police said.
The investigation has a breakthrough when Giampa turned informant, much more unusual in the brutal and closed Calabrian mafia, the 'Ndrangheta, than in Sicily or Naples. Investigators would not say why he chose to give evidence.
In Rome, a Calabrian senator in Silvio Berlusconi's center-right People of Freedom (PDL) party is being investigated for suspected vote buying as part of the investigation, police said.
Another PDL politician, who is deputy chairman of the local airport management company, has been arrested, along with prison guards suspected of being on the boss's payroll. Finance police arrested several local businessmen, including a fireworks manufacturer suspected of providing explosives to the gang.
Giampa is suspected of ordering about 20 murders in a mob war for control of the city between 2005 and 2011. Among those arrested on Friday were hitmen thought to be behind 11 killings, Ruperti said.
"It was a mafia system that not only stained Lamezia Terme with blood and murder, but it also bled dry the already fragile local economy," provincial police chief Guido Marino said.
($1 = 0.7555 euros)
(Editing by Barry Moody and Robin Pomeroy)