The Germans were selling technology to the Soviets even by the late 30's, so an Italian designed engine made available to the Soviets comes at no surprise.
Granted, even the Italians were selling blueprints to the Soveiet Navy yards, however the statements of M-34 being an Italian design are a surprise, since the only thing the M-34 and Italian V12s have had in common was the layout of valvetrain.
Curiously enough, we don't have any Italian or Soviet sources claiming that Fiat designed the M-34.
In regards to the M-17's similarities to the M-34: many engines in the aviation industry had parallels.
The V-1710 was a 60° V with four valves per cylinder driven by an overhead cam, just like the Merlin. They both had a 6" (152mm) stroke and a nearly identical bore: 5.4" (137mm) for the Merlin and 5.5" (140mm) for the Allison.
That however doesn't mean they shared any lineage as they were both developed independantly.
Nobody ever accused Merlin and V-1710 for sharing a lineage.
Also, from a visual standpoint, the M-17 doesn't bear much of a resemblance to the M-34.
However, the M-34 looks a great deal like Fiat's engines from the same time period, such as the AS.3 or the larger A.25 for example.
Visual inspection of a complete engine will not reveal bore, stroke, or what type of rods the engine uses. That M-34 shared with M-17, and didn't share with any Fiat V12 engine.
Also, unlike the M-34, looks like the A.25 and AS.3 have had separate cylinders..