Image
Published on
(Luxembourg, 19 February 2024) – In a probe led by the European Public Prosecutor’s Office (EPPO) in Prague (Czechia), 36 searches were conducted today and ten suspects were arrested, on suspicion of corruption involving public contracts to provide medical supplies to hospitals.
The searches were carried out in 11 cities in Czechia, at the suspects’ homes and offices and at the management offices of two hospitals, by the Czech police’s National Centre against Organised Crime (Národní centrála proti organizovanému zločinu – NCOZ). The suspects include the general manager of a hospital and managers of the contracting authority, as well as directors of suppliers of medical equipment. The ten individuals were formally accused, and the European Delegated Prosecutor in charge of the investigation is considering filing a request to take some of them into custody.
At issue is a suspected criminal organisation, active since at least 2022, and formed with the intention of systematically manipulating the public procurement of medical supplies for hospitals, in order to benefit predetermined suppliers, and, in some cases, procure medical equipment without initiating a procurement procedure. The medical equipment included operating tables, equipment for laparoscopic and arthroscopic surgeries, endoscopes, defibrillators, surgical drills and ventilators.
According to the investigation, pre-determined suppliers had the opportunity to participate in the creation of the tendering conditions in the public procurement management system, before the public announcement of the tender, in order to tailor the contracts to the preferred suppliers. In addition, it is understood that the suspects transmitted confidential information to the preferred suppliers, including the content of the offers from competing suppliers and requests for clarification of tendering documents – allowing preferred suppliers, in some cases, to draft responses to such requests.
Based on the evidence, when a pre-determined supplier was awarded a public contract, they would pay a bribe, worth 10% of the price of the contract, to suspects working for the contracting authority, via an intermediary, who also acted as the head of the organised criminal group. It is alleged that, in order to dissimulate the provenance of the illicit money, the group used forged invoices for fictitious services, issued by associated companies. It is understood that the bribes were subsequently distributed in cash among the members of the organised criminal group, by the head of the organised criminal group.
The supply of some of the medical equipment for hospitals was co-funded by the European Regional Development Fund, under the programme ‘Recovery assistance for cohesion and the territories of Europe’ (REACT-EU). It is estimated that the activities under investigation documented so far by the police authority caused a damage of close to €1 million to the EU budget. The investigation is ongoing, in order to ascertain the extent of the suspected criminal activities and the damage caused, which is expected to be considerably higher.
The offences under investigation are damage to the financial interests of the EU, procurement fraud, active and passive corruption, participation in an organised criminal group and money laundering.
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.
* This press release was amended on 20 February 2024, to include the information, in the second paragraph, that the ten suspects were formally accused and that the European Delegated Prosecutor handling the case is considering filing a request to take some of them into custody.