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Types of Financial Crimes in Estonia: Fraudulent Scheme Uncovered by European Public Prosecutor’s Office
A recent indictment filed by the European Public Prosecutor’s Office (EPPO) in Tallinn, Estonia has exposed a widespread fraudulent scheme involving a company that received EU funds for an IT project. This case highlights the growing threat of financial crimes in the country.
The Fraudulent Scheme
According to investigators, the company, specializing in transport, warehousing and customs services, submitted an application to Enterprise Estonia (EAS) in 2018 for a subsidy from the European Regional Development Fund. The goal was to create an IT program and conduct development activities to implement the company’s value-added sales and marketing activities.
- Project cost: around €725,000
- EU funding: €325,000
However, an investigation revealed that the beneficiary of the funds fabricated invoices and documents to conceal the fact that payments were never made to other companies providing services. Instead, the money was transferred to related companies using false invoices to create a façade of real commercial transactions, deceiving the agency managing the funds.
Charges and Consequences
- Two legal representatives and their company are charged with subsidy fraud
- Three individuals and four companies are accused as accomplices
- If convicted, they face:
- Prison sentences up to five years
- Pecuniary punishment for the companies
Investigation and Evidence
The pre-trial investigation was conducted by the Estonian Police and Border Guard Board’s department of cyber and economic crimes under the direction of the EPPO. In May 2023, searches were carried out at the suspects’ residences and company locations, resulting in extensive documentation being seized.
Upcoming Court Hearing
A preliminary hearing is scheduled for November 14, 2023, in Harju County Court. The accused are presumed innocent until proven guilty in competent Estonian courts.
The European Public Prosecutor’s Office (EPPO)
The EPPO is an independent public prosecution office responsible for investigating, prosecuting, and bringing to justice crimes against the financial interests of the EU. This case serves as a warning to individuals and companies engaging in fraudulent activities that they will be held accountable by law enforcement agencies.
Conclusion
This case demonstrates the importance of vigilance and cooperation between law enforcement agencies to combat financial crimes in Estonia. The EPPO’s efforts to prosecute this fraud will send a strong message to those who would attempt to deceive and defraud, and ensure that EU funds are used for their intended purpose.