Czechia: One person and one company convicted of €650 000 EU funding fraud relating to mining activities

(Luxembourg, 12 January 2024) – On 10 January 2024, following an investigation led by the European Public Prosecutor’s Office (EPPO) in Zlín (Czechia), the branch of the Regional Court of Ostrava in Olomouc convicted one business owner and one company of EU funding fraud.

Between 2020 and 2021, the business owner – who was the beneficiary of a project financed under the European Regional Development Fund (ERDF) – and his company used five construction machines for mining activities, for which the company had received €650 000 (CZK 16.2 million) in subsidies from the Czech Ministry of Industry and Trade. According to the investigation, they did not use the machines in the location specified for the project’s implementation, and therefore knowingly violated the conditions of the project.

Towards the end of the investigation, the business owner expressed regret at his unlawful activity and paid back the total amount of damage of €650 000 (CZK 16.2 million) to the Czech Ministry of Industry and Trade.

The Olomouc branch of the Regional Court of Ostrava approved the agreement on guilt and punishment concluded between the European Delegated Prosecutor and the accused, and sentenced the business owner to three years of imprisonment, with a probationary period of three years, and a pecuniary penalty in the amount of €40 672 (CZK 1 000 000). In addition, he received the sentence of a prohibition of activity, and will not be allowed to be involved in subsidy procedures in any capacity for a period of eight years.

The convicted company had to pay a fine amounting to €81 344 (CZK 2 000 000), and is prohibited from receiving grants and subsides for a period of ten years.

The EPPO-led investigation was supported by the Regional Police Directorate of the Moravian-Silesian Region in Ostrava (Krajské ředitelství policie Moravskoslezského kraje v Ostravě).

The EPPO is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.