Police said the group had also been forging contacts with extremists elsewhere in Europe.
Officers searching the homes of 19 suspects throughout the country, from Milan to Sicily, seized automatic weapons, rifles, crossbows, swords, knives, Nazi flags and books on dictators Adolph Hitler and Benito Mussolini, police said.
Those targeted belonged to the fledgling neo-Nazi Partito Nazionalsocialista Italiano dei Lavoratori, or National Italian Socialist Workers' Party, which has an openly anti-Semitic and xenophobic programme and was in contact with Britain's Neo-Nazi Combat 18 and Portugal's far-right New Social Order.
The police operation originated from local monitoring of extreme right-wing local militants in Enna, Sicily, by anti-mafia and anti-terror police, local media reports.
Their operation revealed a large network of extremists operating in various parts of Italy, united by the same ideology.
The group reportedly aimed to recruit members through social media, and used a closed chat called “Militia” dedicated to training the militants.
One of the most powerful members of the group was a 50-year-old woman in Padua, calling herself the “sergeant major of Hitler”, who police believe was in charge of recruitment for the group.
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Investigators searching her home found propaganda material and banners featuring swastikas and other fascist symbols.
The head trainer of the “militia” was a member of the powerful Calabrian mafia 'Ndrangheta, who had collaborated with police on previous investigations and was a local leader in Liguria of the small, far-right Forza Nuova party, police said.
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