Title: “Two Czech Firms and Managers Convicted of Subsidy Fraud in €170,000 Scam”

June 12, 2023

In a significant move against financial fraud, the Regional Court in Ostrava, Czech Republic,Convicted two companies and their managers on June 7, 2023.

Background

• Two Czech companies, part of the same business group, were convicted of subsidy fraud.
• The investigation was led by the European Public Prosecutor’s Office (EPPO).

The Scam

• Between 2019 and 2023, these companies obtained a subsidy of over €120,000 from the Czech Ministry of Labour and Social Affairs.
• One of these firms, along with its manager, submitted false information regarding their criminal records when applying for the subsidy. Both had previously been accused of a tax crime.

The Deception

• After their conviction for tax fraud, these companies secured up to €50,000 from the European Union’s European Social Fund.
• They made a false declaration that they had no previous convictions.

Discovery and Consequences

• The deception was discovered during an investigation by the EPPO in collaboration with the investigation service of the Regional Police of Moravskoslezský kraj – Ostrava.
• The defendants have since compensated all damages, with interest, stemming from their illegal activities.

Sentencing

• One manager received a sentence of three years’ imprisonment, suspended for five years.
• The other manager received a sentence of two years’ imprisonment, suspended for three years.
• The convicting companies were fined a pecuniary penalty of CZK 200,000 (€8,500).
• Both firms face a ban on applying for subsidies of up to four years’ duration.

Agreement on Guilt and Punishment

The verdicts were a result of an agreement on guilt and punishment, or a plea bargain, as the defendants confessed to all charges. The agreement was approved by Judge [Name] of the Court of Ostrava.