Title: Five Individuals and Companies Indicted in Estonia for EU Funds Fraud in IT Project

Publisher and Date

(Luxembourg) Published on October 13, 2023

Case Overview

The European Public Prosecutor’s Office (EPPO) in Tallinn, Estonia, has indicted five individuals and five companies for involvement in a complex fraud scheme concerning an EU-funded project to develop IT systems.

Background

The controversy originated in 2018 when a company specializing in transport, warehousing, and customs services applied for a grant from Enterprise Estonia. The company aimed to utilize European Union funds to develop an IT programme and perform IT development activities, which would subsequently improve its value-added sales, marketing, and end-to-end services. The estimated cost of the project was around €725,000, with €325,000 coming from the EU.

Fraud Allegations

To obtain EU contribution, the company is accused of submitting fake invoices and documents to Enterprise Estonia. Instead of paying for related services using their own funds, the investigation showed that payments did not occur, and the money was transferred to companies affiliated with the original applicant through false invoices.

Charges and Defendants

Two legal representatives of the company and the firm they managed are among those charged with subsidy fraud. Three individuals and four companies have been identified as accomplices. If found guilty, defendants face penalties including prison sentences of up to five years and financial penalties for the companies.

Investigation

The initial investigation was led by the Cyber and Economic Crimes Department of the Criminal Bureau of the Estonian Police and Border Guard Board, under the supervision of the EPPO. Previous search procedures in May 2023 uncovered substantial evidence, including documents from the suspects’ residences and the firms under investigation.

Legal Proceedings

The preliminary hearing of the criminal case is scheduled to take place in Harju County Court on November 14, 2023. All those implicated in the case are presumed innocent until proven guilty by the Estonian courts of law.

European Public Prosecutor’s Office

The European Public Prosecutor’s Office (EPPO) is the EU’s independent public prosecution authority. Its primary responsibilities include investigating, prosecuting, and bringing to judgment crimes committed against the financial interests of the EU.