Haven't really found out much about it. The best info came from a fellow coworker, I work for an Italian Meat company so I e-mailed some pictures to a guy I know in Rome and here is his reply:
Yes, this is a very classic model of italian folding bike.
The common name in Italy is "Graziella" from the first model produced by Carnielli in the 50's.
They made those until mid-end 80's, when we were kids we used to ride those.
Normally one would drive and your buddy would be standing on the back rack.
And it was also particulary good for doing willies!
May be the tried to export some to the US.
A serch of this site
Vintage Bicycle Genealogy and Archive
turned up this tidbit which seem to verifi what my friend said:
RE:AGE / VALUE: What do I have? posted by Steven on 2/15/2002 at 3:01:48 AM
They were built in Italy and were indeed very popular in the 60's and 70's. They are still a dime a dozen in Italy. They usually were folding bikes with a cam locking device. It seemed to be the ideal solution for getting around in the crowded cities. They are neither great bikes or terribly collectable. Sorry.
The above is about all the information I found on the bike. I think it's an unusual bike and plan on keeping it "spinning" for my grandson! Good luck with yours and if you find any other infomation please share.
Bob