Financial Crime World

European Public Prosecutor’s Office (EPPO) Announces Major Anti-Corruption Operation in Prague, Czech Republic

Ten Suspects Arrested for Money Laundering Scheme Connected to Manipulation of Public Hospital Contracts

**Prague, Czech Republic**, _19 February 2024_

In an effort to combat corruption in the European Union, the European Public Prosecutor’s Office (EPPO) in Prague, Czech Republic, announced today the arrest of ten suspects and the execution of 36 searches.

Arrests and Searches

  • The suspects include a hospital manager and officials from a contracting authority.
  • Authorities conducted searches at 11 locations: the suspects’ homes and offices, as well as two hospitals.
  • The National Centre against Organised Crime (NCOZ), part of the Czech police, carried out the raids.
  • The suspects have been formally accused, and the European Delegated Prosecutor leading the case is considering requesting their detention.

Allegations of Systemic Manipulation of Public Procurement

  • The suspects, believed to be part of a criminal organization active since at least 2022, systematically manipulated the public procurement of hospital medical supplies in order to benefit specific suppliers.
  • In some cases, tenders were even awarded without a proper procurement procedure.

Evidence of Money Laundering and Bribery

  • The ill-gotten funds from these contracts were believed to have been laundered through forged invoices from associated companies.
  • Bribes paid by preferred suppliers, estimated to be 10% of the contract’s price, were routed through an intermediary to a suspect affiliated with the contracting authority.
  • The proceeds from the crime were distributed among members of the organized criminal group in cash by the group’s leader.

Co-Funded Program and Damages to the EU Budget

  • The European Regional Development Fund, under the REACT-EU program, co-funded some of the hospital medical equipment supplies implicated in the case.
  • The damages to the EU budget are estimated to be close to €1 million, with the investigation ongoing to determine the full extent of the criminal activities and damages.

Charges and Crimes Committed

  • The suspected offences include damage to the EU’s financial interests, procurement fraud, corruption, participation in an organized criminal group, and money laundering.
  • The EPPO is an EU-funded, independent public prosecution office responsible for investigating, prosecuting and bringing to court crimes committed against the EU’s financial interests.

Update, 20 February 2024:

Update on Accusations and Proceedings

  • The Europen Delegated Prosecutor handling the case announced that the ten suspects were formally accused.
  • A request to take some of them into custody is being considered.