Tony Vallelonga, the mayor of the City of Stirling in Perth from 1997 to 2005, has been caught up in an international operation in which Italian and German police have arrested 35 people. Vallelonga has denied any wrongdoing and sought legal advice.
The international operation, in which both Italian and German police are involved, has arrested 35 people.
They are alleged to be members of the 'Ndrangheta crime syndicate based in Calabria in Italy's south and have been charged with extortion, drug trafficking, money laundering and other offences.
AFP reports that Italian police have issued warrants for another five people in Canada and Australia, including one for Mr Vallelonga in Perth.
The 64-year-old was not answering his phone, but the receptionist at his property development company Davco Holdings referred inquiries to his lawyer John Hammond.
Mr Hammond told AAP on Mr Vallelonga's behalf that "firstly, any wrongdoing is categorically denied".
"It comes as a complete surprise to Mr Vallelonga and shock, might I add, for both him and his family.
"Mr Vallelonga has an impeccable record of service to the community, particularly to the City of Stirling, where I believe he's a freeman of the city," Mr Hammond said.
He said he would be contacting Australian Federal Police (AFP) and making further inquiries.
A spokeswoman confirmed the AFP had received a request for assistance from Italian police and the matter was being addressed at a government to government level.
She said she could not confirm or deny if the AFP had received a specific arrest warrant for Mr Vallelonga.
Mr Vallelonga migrated to Australia from Calabria in 1963.
AFP reported Italian Interior Minister Roberto Maroni as saying the operation had dealt a serious blow to the 'Ndrangheta in Italy and abroad.
He said six people arrested in Germany and others targeted by three warrants in Canada and two in Australia were accused of recycling illicit funds from Italy in shops and small construction businesses.
Carlo Pieroni, a spokesman for Carabinieri paramilitary police in the southern Italian region of Calabria said one of the men arrested in Italy hid in a bunker for several hours.
"He hid in a bunker under the house and we negotiated to get him out and arrest him. We didn't want to go in with pneumatic drills to dig him out," Pieroni said.
