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(Luxembourg, 13 October 2023) – The European Public Prosecutor’s Office (EPPO) in Tallinn (Estonia) has filed an indictment in the Harju County Court against five individuals and five companies, for fraud involving a project to develop IT systems, co-funded by the EU.
The facts date back to 2018, when a company specialised in transport, warehousing and customs services along the e-commerce chain submitted an application to Enterprise Estonia (EAS), the national agency responsible for awarding and paying EU funds (currently named Estonian Business and Innovation Agency), requesting a subsidy from the European Regional Development Fund. The aim of the funds was to create an IT programme and carry out IT development activities, in order to implement the company's value-added sales and marketing activities and the end-to-end service of the company.
The total cost of the project was around €725 000 – 45% of which (around €325 000) was financed by EU funds, and the remaining by the company’s own funds.
In order to receive the EU contribution, the beneficiary of the funds submitted invoices and documents to certify that the company had made payments with the company’s own resources to other companies providing the services.
However, according to the investigation, the payments were never actually made.
According to the evidence, the beneficiary of the funds transferred the money to related companies, using false invoices to create the appearance of real commercial transactions, in order to mislead the agency managing the funds. The investigation revealed that the money ended up being transferred back to the beneficiary of the funds or to companies related or controlled by the beneficiary of the funds.
Two legal representatives of the company that was granted the funds, as well as the company they managed, are charged with subsidy fraud. In addition, three individuals and four companies are charged as accomplices of the fraud. If convicted, the defendants face prison sentences up to 5 years and the companies pecuniary punishment.
The pre-trial investigation was carried out by the department of cyber and economic crimes of the Criminal Bureau of the Estonian Police and Border Guard Board (Politsei- ja Piirivalveamet, kriminaalbüroo, küber- ja majanduskuritegude talitus), under the direction of the EPPO.
Earlier in this investigation, in May 2023, searches were conducted in the places of residence of the suspects, as well as in the locations of the companies investigated. Extensive documentation was apprehended.
The preliminary hearing of the criminal case will be held in Harju County Court on 14 November 2023.
All persons concerned are presumed to be innocent until proven guilty in the competent Estonian courts of law.
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.