Financial Crime World

Types of Financial Fraud in Romania Exposed: €4 Million Scam Uncovered

The European Public Prosecutor’s Office (EPPO) has brought charges against six individuals and six companies for aggravated fraud and money laundering, uncovering a massive scam that obtained €4 million in EU funds by simulating medical and IT research projects.

How the Scam Worked

The suspects created two fake projects aimed at purchasing medical equipment and software licenses, financed up to 70% by the European Union. One project was supposed to establish a research department for treating neuro-motor diseases, while the other aimed to develop innovative software programs to combat illegal trafficking of goods.

However, instead of using the funds as intended, the suspects:

  • Awarded acquisition contracts to companies under their control, which lacked the capacity or resources to purchase the equipment
  • Produced fake invoices with inflated prices and simulated payment circuits to certify the payment of their private contribution
  • Forged documents to certify that the equipment had been purchased and was functioning properly

Investigation Reveals Further Fraud

The investigation revealed that some of the illicit profits were used for:

  • Leisure activities
  • International travel
  • Maintaining a power yacht
  • Purchasing real estate valued at €8.5 million, which has been seized by authorities to recover the damage to the EU budget

Consequences Under Romanian Law

Under Romanian law, aggravated subsidy fraud is punishable by up to 10- and-a-half years of imprisonment, while money laundering can result in up to 10 years behind bars.

EPPO’s Role in Combating Financial Fraud

The EPPO, an independent public prosecution office of the European Union, is responsible for investigating and prosecuting crimes against the financial interests of the EU. This latest case highlights the importance of combating financial fraud in Romania and beyond.

Key Takeaways

  • The scam involved €4 million in EU funds obtained by simulating medical and IT research projects
  • The suspects used fake invoices and forged documents to certify payment
  • Real estate valued at €8.5 million has been seized to recover the damage to the EU budget
  • Aggravated subsidy fraud is punishable by up to 10- and-a-half years of imprisonment, while money laundering can result in up to 10 years behind bars