Financial Crime Case Rocks Estonia: Five Individuals and Five Companies Charged with Subsidy Fraud
Introduction
In a shocking development, the European Public Prosecutor’s Office (EPPO) in Tallinn has filed an indictment against five individuals and five companies for fraud involving a project to develop IT systems co-funded by the European Union.
The Scheme
The scheme dates back to 2018 when a company specializing in transport, warehousing, and customs services submitted an application to Enterprise Estonia (EAS) for a subsidy from the European Regional Development Fund. The funds were meant to create an IT program and carry out development activities to support the company’s sales and marketing efforts.
Investigation
However, investigators found that the company never actually made the payments it claimed to have made to other companies providing services. Instead, it used false invoices to create the appearance of real commercial transactions in order to mislead the agency managing the funds.
The money was ultimately transferred back to the beneficiary or to companies related or controlled by the beneficiary. Two legal representatives of the company and the company they managed are charged with subsidy fraud, while three individuals and four companies are accused of being accomplices.
Consequences
If convicted, the defendants could face prison sentences up to five years, as well as pecuniary punishment for the companies involved.
Investigation Details
The investigation was carried out by the Estonian Police and Border Guard Board’s department of cyber and economic crimes under the direction of the EPPO. Searches were conducted in May 2023 at the homes and offices of the suspects, resulting in the seizure of extensive documentation.
- The search warrants were executed simultaneously at various locations across Estonia.
- A total of [number] documents and digital storage devices were seized during the searches.
- The investigation is ongoing, with further evidence being analyzed to determine the extent of the fraud.
Court Hearing
A preliminary hearing is set to take place on November 14, 2023, in Harju County Court. All parties are presumed innocent until proven guilty in a competent Estonian court of law.
EPPO’s Role
The EPPO is responsible for investigating, prosecuting, and bringing to judgment crimes against the financial interests of the European Union.
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