Financial Crime World

European Public Prosecutor’s Office Busts €4 Million Subsidy Fraud in Lithuania

(Luxembourg, 26 April 2024)

In a significant crackdown on financial fraud, the European Public Prosecutor’s Office (EPPO) led an investigation in Vilnius, Lithuania. The following are the key details of the operation.

€4 Million Subsidy Scam Uncovered in Lithuania

  • Last week, the European Public Prosecutor’s Office executed 40 searches in Vilnius, Lithuania.
  • Nine individuals were arrested in connection with a €4 million subsidy scam.

Projects at the Heart of the Alleged Fraud

  • Four EU-funded projects were at the heart of the alleged fraud.
  • One project aimed to produce Covid-19 protective equipment, including disinfectant liquids and personal protective equipment.
  • The other projects were intended to set up new packaging production lines and equipment for increased productivity.

Fraudulent Methods Used to Secure Funding

  • The suspects allegedly used fraudulent methods to secure European Union and Lithuanian funds under the 2014-2020 EU Funds Investment Programme.
  • They submitted projects to Lithuania’s Innovation Agency on behalf of two companies.
  • To camouflage the deception, the suspects involved eight inactive companies.

Simulated Transactions and Artificially Inflated Prices

  • Once the projects had been approved, the suspects used affiliated companies to engage in simulated transactions.
  • By artificially inflating the equipment prices, the fraudsters obtained more than €4 million in funds, surpassing the actual cost of the equipment.

Investigative Measures and Seized Evidence

  • Lithuania’s Financial Crime Investigation Service (FNTT) spearheaded the investigative measures.
  • During the raids, officers seized relevant documents and evidence, along with €20,000 in cash.
  • The suspects’ bank accounts were frozen, and assets, including real estate and plots of land, were seized.

Suspects Under Pre-Trial Detention and Surveillance

  • Two suspects were placed in pre-trial detention.
  • Two others were put under police surveillance.
  • Five suspects were barred from changing their places of residence.

EPPO’s Role in Investigating, Prosecuting, and Bringing to Justice Crimes against the EU’s Financial Interests

  • The European Public Prosecutor’s Office (EPPO) is the EU’s dedicated prosecutorial agency.
  • It is mandated with investigating, prosecuting, and bringing to justice crimes against the EU’s financial interests.