Czech Police and European Public Prosecutor’s Office Uncover Multi-Million Euro Medical Supplies Scam
(Luxembourg, 19 February 2024)
Raids and Arrests
The European Public Prosecutor’s Office (EPPO) in Prague, Czech Republic, led an unprecedented probe against a suspected criminal organization involved in corruption and fraud revolving around public hospital medical supplies contracts.
- Searches and Arrests: Thirty-six searches took place on the 19th of February, resulting in the arrest of ten suspects. Searches were executed in 11 cities across Czechia, targeting the homes and offices of the suspects as well as the management offices of two hospitals.
- Suspects: The suspects included a hospital general manager, contracting authority managers, and directors of medical equipment suppliers.
Corruption and Fraud Allegations
At the core of the alleged criminal organization, believed to have been active since at least 2022, was a systemic manipulation of the public procurement process for hospital medical supplies. Favored suppliers were allowed to secure contracts and bypass the procurement procedure in some instances.
Equipment Involved: The targeted equipment encompassed operating tables, laparoscopic and arthroscopic surgery equipment, endoscopes, defibrillators, surgical drills, and ventilators.
Manipulation of the Public Procurement Process
The organized crime group reportedly influenced the tendering conditions within the public procurement management system prior to the public tender’s announcement. Confidential information, including competing suppliers’ offers and clarification requests, was transmitted to preferred suppliers.
Bribes and Money Laundering
Upon being awarded a public contract, favored suppliers allegedly paid bribes, worth approximately 10% of the contract’s value, to corrupt individuals within the contracting authority. Ill-gotten money was then distributed among the members of the organized criminal group, which employed forged invoices from associated companies to launder the money.
Damages to the EU Budget
An estimated €1 million in damages to the EU budget have been documented; EU funds, such as the European Regional Development Fund, contributed to the financing of hospital medical equipment in this scandal. The ongoing investigation is expected to uncover significantly more damages.
Charges and Responsibilities
The charges against the suspects include:
- Damage to the EU’s financial interests
- Procurement fraud
- Corruption in various forms
- Membership in a criminal organization
- Money laundering
European Public Prosecutor’s Office
The EPPO is the European Union’s primary independent public prosecution agency, responsible for investigating, prosecuting, and bringing to justice crimes that harm the EU’s financial interests.
(Update, 20 February 2024)
Update
The European Public Prosecutor’s Office officially announced that the ten suspects were formally accused, and the European Delegated Prosecutor managing the case is currently considering submitting detention requests for some of the suspects.