In an investigation led by the European Public Prosecutor’s Office (EPPO) in Prague (Czechia), three companies and 13 individuals have been charged with subsidy fraud involving the acquisition of manufacturing machinery, with estimated damages of up to €3 million.
On the radar of the EPPO is a manufacturer of consumables for the automotive industry, shipyards and the steel industry. The company submitted applications to buy new and innovative machinery for welding and cutting metals, under the EU’s Operational Programme Enterprise and Innovation for Competitiveness.
However, according to the evidence, the machinery that ended up being purchased was old, and therefore much cheaper than what was claimed.
It is believed that the manufacturer colluded with companies that acted as suppliers of the equipment, in order to provide a paper trail to justify the payment of the funds.
The members of the suspected organised group are owners, managers or employees of the three companies involved. The scheme under investigation allowed them to obtain more than €2.9 million (CZK 71 823 278) in EU funding. They are also believed to have attempted to obtain an additional €918 000 (CZK 22 048 840) in EU funds.
One of the defendants is currently in pre-trial detention.
Before charging the suspects, Czechia’s National Organised Crime Agency (Národní centrála proti organizovanému zločinu – NCOZ) carried out, on 5 June 2023, 14 searches at the suspects’ homes and the offices of the companies, on behalf of the EPPO. The police seized machinery and issued freezing orders of up to €1.28 million (CZK 30.8 million), in order to recover the damage to the EU budget.
The European Anti-Fraud Office (OLAF) supported the EPPO’s European Delegated Prosecutor by conducting a complementary investigation.
*An earlier version of this press release stated that 15 suspects had been charged. It's been corrected to 16.