Hungarian-born Greta Gila was arrested after cops burst into her hotel at Rome airport after she had flown in from London and accused her of being part of an international drugs courier network.
She was held on remand for 74 days before eventually being released but had to spend a further six months in Italy signing on every day at a police station while the case was investigated.
She had been on a stopover in the Italian capital and was due to meet a costume designer who was going to travel on with her to Tokyo.
However, the designer woman had been intercepted by police in Brazil carrying 11 kilos of cocaine.
Unknown to Greta, officers had allowed her to continue as part of a “controlled delivery” to see where the drugs ended up.
As she sat in her hotel room chatting to her parents on the telephone armed cops burst in and she was arrested.
Lawyer Massimiliano Scaringella eventually managed to secure her freedom after she appeared in court and had the case against her thrown out by a judge for lack of evidence.
They took the case to Rome's Supreme Court where they initially tried to sue the Italian Government for €100,000 claiming her life had been ruined by the experience.
But they ruled she should be given €23,300 instead. She and Massimiliano have vowed to carry on fighting for more compensation.
Greta, a former Miss Universe entrant, had been promised €1,750 for the assignment by the London agency who hired her for the shoot in March 2019.
Greta told MailOnline: “I'm obviously happy with the result and the victory but the compensation is nowhere near enough for what I had to go through.
“Of course morally I am also happy because the Court accepted that I did nothing wrong and I should not have spent 74 days in jail for something I didn't do.
“My life was on hold for almost a year because even after being released after almost three months in prison I had to spend another six months in Italy under house arrest while the case was investigated.
"My career suffered and I still haven't been able to get back to work properly and instead I am now a painter but modelling was always my first love and I would like to return to it.
"The whole experience was a nightmare for me and as far as I am concerned justice has not yet been fully achieved."
She added: “I can still remember vividly the whole thing. I was in the hotel room with a man who said he was representing the agency, he seemed nervous and on edge and he told me we were waiting for the stylist to arrive.
"There was a knock on the door and he told me to go to the bedroom and this woman walked in and a few seconds later armed police burst in and took us all away - I was on the phone to my patents at the time and they heard everything."
Mr Scaringella said: “As Greta says we are happy with the result but the compensation is completely inadequate, my client suffered a great deal of distress throughout this experience.
“The absence of real compensation for unjust detention in the Italian legal system is undoubtedly a violation of human rights and we plan to take the case to the European Court of Human rights, to try and force a change in the law."