Title: Five Individuals and Companies Charged with EU Funds Fraud in Estonia
Date: 13 October 2023
(Luxembourg) - The European Public Prosecutor’s Office (EPPO) in Tallinn, Estonia, has initiated criminal proceedings against:
- Five individuals,
- Five companies,
for their suspected involvement in a financial fraud scheme related to an IT development project funded by the European Union (EU).
Background
A company specializing in transport, warehousing, and customs services, submitted an application to Enterprise Estonia (EAS) in 2018 for €725,000 in subsidies from the European Regional Development Fund (ERDF) for an IT project. The EU contributed approximately €325,000.
Allegations
To receive EU financing, the applicant company was mandated to submit invoices and documentation, demonstrating payment from their own funds to the IT service providers. However, an investigation by the Estonian Police and Border Guard Board (Politsei- ja Piirivalveamet) discovered that these payments did not occur.
Instead, the beneficiary of the EU funds reportedly transferred the money to companies linked to themselves, using fake invoices to deceive Enterprise Estonia. The funds were then allegedly returned to the original beneficiary or redirected to other controlled entities.
Charges
Two legal representatives of the grant-recipient company, as well as the company they managed, are among those charged with subsidy fraud. Furthermore, three individuals and four companies are implicated as accomplices in the alleged scheme.
Conviction under the charges may lead to prison sentences of up to five years for individuals and penalties for the companies.
Investigation and Preliminary Hearing
An earlier phase of the investigation took place in May 2023, involving residential searches and seizures of documents from the defendants and their companies.
The preliminary hearing of the criminal case will occur at the Harju County Court on 14 November 2023.
Information and Disclaimer
All accused are presumed innocent until proven guilty by the Estonian courts of law.
The European Public Prosecutor’s Office is the European Union’s dedicated prosecution authority for investigating, prosecuting, and bringing to judgment offenses targeting the EU’s financial interests.
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