Financial Crime World

Five Arrested in Lithuania for Alleged €343,000 Financial Fraud Involving EU Funds

Published on October 7, 2022

Overview

Five individuals, including a company director and two former EU funding allocation employees, were arrested in Lithuania on suspicion of credit fraud and document forgery to secure approximately €343,000 in European Union (EU) funds.

Background

The investigation, led by the Lithuanian Financial Crime Investigation Service and the European Public Prosecutor’s Office (EPPO), began following suspicious activities in two Lithuanian companies in August 2019.

Companies’ Agreement and Alleged Fraudulent Acts

  • In 2019, the two Lithuanian companies entered into agreements with the Lithuanian Public Institution Innovation Agency to receive funding for business development and modern production equipment projects, worth approximately €885,000.
  • EU funds were expected to cover 45% of the costs.
  • Preliminary evidence suggests that the companies lacked the necessary funding sources to complete the projects.
  • The suspects reportedly:
    • Forged loan documents from banks.
    • Provided false data on loan applications.
    • Inflated equipment prices.
    • Used fabricated documents from equipment manufacturers.
    • Conspired to secure the EU funds unlawfully.
  • The companies’ director is believed to have received over €343,000 in EU funding.

Execution of Search Warrants

In the course of the investigation, officers carried out 24 searches at homes, vehicles, workplaces, and accounting companies in Vilnius, Kaunas, Klaipėda, and other Lithuanian cities. Seized items included accounting records, electronic communication tools, and other objects.

Suspicion Notices and Temporary Restraining Order

  • The suspects faced suspicion notices for fraud, credit fraud, document forgery, and illegal possession of documents.
  • A temporary restraining order securing €810,000 in property rights was also placed.

Significance of the Case

The case serves as a reminder of the importance of accountability and regulatory compliance in the European financial systems. The EPPO works to combat EU-level crimes and ensures the integrity of EU funding and the rule of law within the European Union.