Common Financial Crimes Committed by Individuals in Estonia Exposed

Estonia has recently witnessed a surge in financial crimes committed by individuals, with the European Public Prosecutor’s Office (EPPO) in Tallinn filing an indictment against five individuals and five companies for fraud involving a project to develop IT systems.

The Case: A Fraudulent Scheme

The case dates back to 2018 when a company specializing in transport, warehousing, and customs services submitted an application to Enterprise Estonia (EAS) requesting a subsidy from the European Regional Development Fund. The aim was to create an IT program and carry out IT development activities to implement the company’s value-added sales and marketing activities.

The Fraudulent Scheme Unfolds

The total cost of the project was around €725,000, with 45% financed by EU funds and the remaining by the company’s own funds. However, an investigation revealed that the payments were never actually made.

According to evidence, the beneficiary of the funds transferred money to related companies using false invoices to create the appearance of real commercial transactions, misleading the agency managing the funds. The money ended up being transferred back to the beneficiary or to companies related or controlled by them.

Charged Individuals and Companies

Two legal representatives of the company that was granted the funds, as well as the company they managed, are charged with subsidy fraud. Three individuals and four companies are also charged as accomplices of the fraud. If convicted, the defendants face prison sentences up to 5 years and pecuniary punishment for the companies.

Investigation and Search

The pre-trial investigation was carried out by the department of cyber and economic crimes of the Criminal Bureau of the Estonian Police and Border Guard Board under the direction of the EPPO. Earlier in this investigation, searches were conducted in May 2023, resulting in extensive documentation being apprehended.

Upcoming Preliminary Hearing

The preliminary hearing of the criminal case will be held on November 14, 2023, in Harju County Court. All persons concerned are presumed innocent until proven guilty in competent Estonian courts.

The EPPO’s Efforts

The European Public Prosecutor’s Office is responsible for investigating, prosecuting, and bringing to judgment crimes against the financial interests of the EU. The agency’s efforts have led to a significant increase in the detection and prosecution of financial crimes in Estonia, highlighting the need for continued vigilance to prevent such offenses.

Conclusion

This case serves as a reminder of the importance of preventing financial crimes and highlights the need for continued cooperation between law enforcement agencies and public prosecutors to combat these types of offenses.