Financial Crime World

European Agencies and Authorities Crack Down on Major Financial Fraud Case in Lithuania

On 27 February 2023, around 250 law enforcement officers and judicial representatives, with the support of Eurojust and Europol, dismantled an organized crime group (OCG) based in Lithuania. This operation represents a significant milestone in Europe’s ongoing battle against financial fraud.

Arrest of the Criminals

A total of 18 individuals, including the three main suspects, were arrested during the raids that targeted 55 locations across the country. The suspects, reportedly of Italian and Lithuanian nationalities, had established a web of enterprises to carry out fraudulent financial transactions. These activities, which began in 2016, included tax evasion, cyber fraud, fake bankruptcy, drug trafficking, and other criminal operations.

Uncovering the Scheme

The OCG allegedly took advantage of a previously uncovered building bonus fraud scheme in Italy. In this scam, fraudsters were granted bonuses for non-existent renovation works. The primary suspect behind this scheme was a practicing tax consultant, who was arrested in Lithuania. EUR 15 million was obtained under false pretenses and laundered through the Lithuanian financial institution.

Key points:

  • Italy: Building bonus fraud scheme
  • Primary suspect: Practicing tax consultant
  • Total funds stolen: EUR 15 million

International Collaboration

Italian and Lithuanian authorities launched investigations in 2021, with assistance from Europol and Eurojust. By the end of 2022, the Lithuanian authorities had shut down the electronic payment institution involved, revoked its banking license, and initiated bankruptcy proceedings.

Additional actions taken:

  • Freezing of millions in funds, real estate properties, and luxury vehicles
  • Dismantling the web of enterprises

Eurojust and Europol’s Role

Eurojust facilitated the formation and funding of a joint investigation team among the involved countries. They also established a coordination centre to support simultaneous actions in Italy, Latvia, and Lithuania.

Key contributions:

  • Facilitated the restitution of over EUR 3 million of illegally obtained public funds to Italy
  • Organized eight coordination meetings to prepare for the coordinated actions
  • Prevented potential conflicts of jurisdiction

Europol provided expert support to the national investigators since January 2022. During the action day, two Europol analysts were deployed to Latvia to aid in investigative measures, while a third specialist was dispatched to the Eurojust coordination center. A Europol analyst was also available at their headquarters to manage contributions shared via Europol’s secure communication channels.

Quote from the officials:

The successful takedown of this criminal organization underscores the importance of a well-coordinated and prepared approach across Europe. Eurojust plays an essential role in transnational judicial cooperation, demonstrating to criminal networks that we have no borders. We will remain committed to working together to bring justice and address fraud involving public funds. - Aldo Ingangi, acting National Member for Italy; Margarita Šniutytė-Daugėlienė, Eurojust Vice-President and National Member for Lithuania; Dagmāra Skudra, National Member for Latvia.

Participating Authorities

The action against the OCG came from a joint effort between the following authorities:

  • Italy: Public Prosecutor’s Offices of Naples and Lecce, Guardia di Finanza of Naples and Lecce
  • Latvia: Prosecutor General’s Office, Rīga Judicial Region Prosecution Office, 1st Unit of the Economic Crime Enforcement Department of the Central Criminal Police Department of the State Police
  • Lithuania: Vilnius Regional Public Prosecutor’s Office, Vilnius County Police Headquarters.