Hi there,
as a Velvet 400 owner myself I hope I can provide you with some information on this scoot. At first my peronal and general opinion: this one is the best scooter for my everyday commuting through the traffic, however it does have some faults. And now to the facts:
The Velvet 400 has an engine from MORINI FRANCO MOTORI and the engine code is: FM400-4T-4V This engine is often mistaken with the early (99-06) Suzuki Burgman 400 engine and even with the Yamaha Majesty 400 engine. In fact the Morini 400 shares some parts (variator, clutch, oil filter, etc.) with the Burgman, but all other components are different, it also has totally different bore, stroke and other dimensions. According to Morini they wanted to copy and improve the contemporary Japanese design. It was the very first four stroke engine from this small Italian engine manufacturer. The owner of the company, Franco Morini was the cousin of the founder of Moto Morini as far as I know, but he split from the family and created his own firm which specialized in engine manufacturing for scooters and motorcycles. Some of their two-stroke products are built in in Suzuki 50 cc (Katana) scooters, Italjet, etc. The FM400 had however only a few applications, so far I know only the Benelli Velvet, the Malaguti Madison K400 and the AXR 400 buggy (yes, it is a 4-wheel off-road vehicle). Good news is that the Chinese seem to have bought the license (or even the whole company?) for this engine and there are a loads of Chinese scooters under different brands (Sachs, Italjet, FMI, etc.) with this engine. Unfortunately these brands do not have retailers in Europe, so I could not find a source for aftermarket parts up til now, neither I could find them on Aliexpress, etc. The engine itself is not a bad construction at all (I am also engineer myself, so I dare to say it), the only two weak points are the cam drive and the lack of electronic fuel injection (which is the cause of the quite high fuel consumption --> for me around 5,1-5,6 l/100km in heavy traffic). As for now the Malaguti dealers (this company has also gone bankrupt some 2-3 years ago) seem to be the best way to obtain factory parts for the engine. In Hungary there is an official Malaguti dealer that supplied complete kit (cam chain, guide, tensioner and sprockets) for about 350€ which is not a bad price at all, but it still remains a weak construction. A part list as well as a repair manual you can find on the website of the Swiss Malaguti importeur: Repair manual (in 5 languages):
http://www.malaguti.ch/fileUpload/downloads/85/M0081 Madison K 400 Motore INT.pdf Parts list:
http://www.malaguti.ch/fileUpload/downloads/86/M0082 Madison K 400 Ciclistica INT.pd f Price list (from 2011):
http://www.malaguti.ch/fileUpload/downloads/273/nuovo listino ricambi malaguti 24.11.2011. pdf (this one is quite old and in in Swiss Francs, but gives you a clue what a part would cost)
My mechanic however experimented with a conversion to a Piaggio cam chain guide/tensioner and it seems to work very well. I cannot tell you what type of Piaggio cam tensioner/guide has been reworked for this purpose because it is his know-how. (MP3 250 maybe?)
Apart from the chain guide and tensioner the engine is quite reliable, I have done about 20000 kms without any problems since I bought the scooter two years ago. To be honest, I was already aware of the tensioner problem from some Malaguti owners, so I took the risk and also replaced the cam chain (only the chain) right after I took hold of the bike.
So to sum up things: this is a very good scoot. Once I was a sworn enemy of scooters but this one made me let the motorcycle in the garage for the everyday commuting and use the automatic scooter for this purpose. If you do not have the time to mess around but you still want to keep the bike, get a complete kit from Malaguti and you have rest for at least 20-25000 kms. If you do want to get rid of the problem, sell the bike or make the conversion for the Piaggio cam guide. In any case you would have questions, do not hesitate to ask me.