It is thought that the procession paid tribute to a convicted mafia boss and a band played The Godfather theme tune.
The controversial ceremony took place as the town honoured Santa Barbara, its patron saint.
Plain clothes police officers observed the procession in Paterno, a town home to the 'Ndrangheta mafia.
The gang is accused of making millions from cocaine trafficking, as well as prostitution and other crimes.
The Daily Telegraph has also suggested that there has occasionally been an ambiguous relationship between organised crime and the Catholic Church.
Locals carrying two statues of a saint paused outside the family home of Salvatore Assinnata, a convited mob boss, who resides in prison.
The two men performed 'salutes' dipping the statues as The Godfather music played.
Police reported the incident to prosecutors, who are now looking into how the 'salutes' were allowed by organisers of the procession.
The mayor of Paterno said: "To take advantage of a religious festival in honour of our patron saint in order to convey a message against legality and to celebrate the culture of mafica is an intolerable act for our community."
Last month Pope Francis visited Calabria and verbally attacked organised crime.