A Rome court Thursday revoked a house arrest order for Silvio Scaglia, the billionaire and Fastweb SpA (FWB.MI) founder standing trial in an alleged EUR2 billion money-laundering and tax-fraud scheme.

The court set Scaglia free after getting the consent of the public prosecutor's office, which accuses Scaglia of criminal conspiracy to commit tax fraud, according to a statement by Scaglia.

He expressed relief at being set free after a year of being held in prison and kept under house arrest. He also insisted on his innocence.

"I trust the Italian administration of justice," he said. "I believe that I will demonstrate my innocence during the on-going trial."

Prosecutors accuse Scaglia and other former executives of Fastweb and Sparkle, a cable unit of Telecom Italia SpA (TIT.MI), of being aware of the purchase and sale of EUR2 billion of services using phony companies.

The alleged practice allowed Fastweb and Sparkle to reap as much as 400 million euros in tax credits, they say.

Fastweb and Telecom Italia have denied any wrongdoing, saying they are victims of a fraud.

In addition to Scaglia, 35 other suspects are on trial.

Scaglia launched e.Biscom, as Fastweb was formerly known, in 1999, bringing high-speed Internet services to Italy. He served as Fastweb's chief executive until 2003 and as chairman until 2007, when Swisscom AG (SCMN.VX) acquired the company.

-Gilles Castonguay, Dow Jones Newswires; +39 02 5821-9908; gilles.castonguay@dowjones.com
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