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Renovation of Old Property for Public Purposes: Investigations Uncover Fraudulent Activities
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A recent investigation has revealed that a property renovation project aimed at converting an old building into a public facility was marred by fraudulent activities. The final beneficiary, who submitted the project proposal to the Managing Authority, allegedly provided false declarations and falsified documents to comply with eligibility criteria.
Investigation Details
The investigation, which falls under the European Social Fund (ESF) category, revealed that the economic operator applied for a subsidy without satisfying the general conditions on expertise, organization, and qualification required by the call for proposals. The operator submitted false documentation and declarations to prove compliance with the requirements, and also overstated its costs by presenting an inflated declaration of expenditure to the Managing Authority.
Other Cases of Fraudulent Activities
Inflating Costs
In another case, a final beneficiary inflated its costs by submitting false invoices to the Managing Authority for expenses never incurred. The investigation revealed that the shareholders of the final beneficiary created another limited company with no other aim than to issue false invoices to be passed onto the final beneficiary in order to inflate its costs.
Forged Invoices
Another case involved a final beneficiary who submitted false invoices to the Managing Authority to inflate its costs and obtain higher reimbursements. The modus operandi was to forge invoices received from suppliers by simply adding a zero to the amount indicated on the purchasing invoice.
Retrospective Project
In yet another case, a municipality applied for a subsidy for a project that had already been implemented, known as a “retrospective project”. Investigations revealed that the works carried out under the first project were part of the works of a second project, which received another subsidy from the 2000-2006 programming period.
Vulnerabilities Detected
The investigations highlighted several vulnerabilities in the system, including:
- Shareholder of a final beneficiary having an economic interest in another final beneficiary
- Supporting documents constituting declarations issued by the final beneficiary instead of certificates issued by public authorities
- Typology and amount of the contract falling within the obligation for launching a tender procedure
Conclusion
These findings demonstrate the need for increased vigilance and transparency in project proposals to prevent fraudulent activities. The Italian Anti-Fraud Coordination Service (Co.L.A.F.) will continue to monitor these cases and work to ensure that EU funds are used in accordance with the principles of transparency, accountability, and integrity.
Contact Information
For further information or assistance, please contact:
Vincenzo BRANCHI Presidency of Council of Ministers (Prime Minister’s Office) Department for European Policies Co.L.A.F. - Anti-Fraud Coordination Service +39 06 67795482 +39 3288645269