Financial Crime World

Title: Five Individuals and Companies Charged with White-Collar Crime in Estonian Finance Sector

![Five individuals and five companies were charged with white-collar crime in Estonia.](Credit: Estonian Police)

Published on 13 October 2023

Three Key Takeaways

  • The European Public Prosecutor’s Office (EPPO) in Estonia charged five individuals and five companies with fraud against the European Union’s Regional Development Fund.
  • The alleged scheme involved falsifying invoices and transferring funds between related companies to deceive the authority managing the EU funds.
  • The investigation was led by the cyber and economic crimes unit of the Estonian Police and Border Guard Board.

(Luxembourg, 13 October 2023) – The European Public Prosecutor’s Office (EPPO) in Tallinn, Estonia, announced on Thursday that it has filed an indictment against five individuals and five companies in the Harju County Court for allegedly committing fraud against the European Union’s Regional Development Fund.

Background

The controversy began in 2018 when a transport and logistics company submitted a grant application to Enterprise Estonia (EAS), the Estonian agency responsible for awarding and managing EU funds. The objective of the €725,000 grant was to create an IT programme and conduct IT development activities, strengthening the applicant company’s sales and marketing efforts and offering a complete end-to-end service.


Fraud Allegations

In order to receive these EU funds, the beneficiary was required to submit invoices and supporting documentation to prove that payments for third-party services had been made using the company’s own resources. However, according to the EPPO’s investigation, these payments were never made, and the invoices appeared to be falsified. Instead, the funds were transferred to related companies, which in turn funneled the money back to the applicant company.


Charges and Penalties

Two legal representatives of the company, along with their managed company, were charged with subsidy fraud. Three individuals and four companies were named as accomplices in the case. The defendants, if found guilty, could face prison sentences of up to five years and hefty financial penalties for the companies involved.


Investigation and Evidence

The pre-trial investigation was led by the cyber and economic crimes unit of the Estonian Police and Border Guard Board, under the direction of the European Public Prosecutor’s Office. Searches were conducted at the suspects’ residences and the premises of the investigated companies back in May 2023, resulting in significant evidence being retrieved.


European Public Prosecutor’s Office Overview

The European Public Prosecutor’s Office is the EU’s independent public prosecution agency responsible for the investigation, prosecution, and adjudication of crimes causing financial damage to the EU’s financial interests.


It is important to note that all those charged are considered innocent until proven guilty by the Estonian legal system.