Six Romanian Individuals and Companies Charged with Aggravated Fraud and Money Laundering over €4M EU Funds

(Iași, Romania and Luxembourg, 31 January 2024)

The European Public Prosecutor’s Office (EPPO) in Iași, Romania, announced on Tuesday the filing of charges against six individuals and six companies for aggravated fraud and money laundering. The investigation, led by the EPPO, concerns the misappropriation of €4 million in EU funds, intended for medical and IT research in Romania.

Alleged Criminal Organization Targeting EU-Financed Projects

The investigation uncovered a suspected criminal organization that manipulated the acquisition contract process for two EU-financed projects in Romania:

1. A research department for neuro-motor diseases
2. A project for developing innovative software programs against illegal goods trafficking

While the beneficiaries were required to provide proof of payment for their 30% contribution before receiving the remaining 70%, the suspects reportedly awarded contracts to a company under their control. This company lacked the resources to purchase the necessary equipment.

Manipulating Payment Certification and Money Laundering

To certify their payments for the private contribution, the suspects allegedly produced inflated invoices, approximately three times the genuine cost, from another firm under their influence. They also simulated payment circuits, moving funds through their accounts before benefiting from the unjustified remunerations.

Fabricating Equipment Acquisition Documentation

The investigation further alleges that the group fabricated documents to demonstrate that the equipment had been acquired and was functioning correctly, while in reality, the purchases were made much later.

Lifestyle Expenses and Asset Seizure

A portion of the illegal profits was spent on luxury travel and leisure activities of the suspected ringleader in several EU Member States and the maintenance of a power-yacht. In a prelude to the case, the EPPO had seized the suspects’ real estate properties worth €8.5 million.

Romania’s National Legislation and the European Public Prosecutor’s Office

Aggravated subsidy fraud in Romania is punishable by up to ten-and-a-half years in prison, while money laundering carries a penalty of up to ten years. The European Public Prosecutor’s Office (EPPO) is a supranational body responsible for investigating, prosecuting, and bringing to judgment crimes against the EU’s financial interests.