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Lithuania: Five arrested for credit fraud of up to €343 000

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Last week, in a European Public Prosecutor‘s Office (EPPO) investigation, officers from the Lithuanian Financial Crime Investigation Service arrested five persons and carried out searches in a case of suspected credit fraud and forgery of documents for obtaining up to €343 000 in European Union funds.

In August 2019, two companies concluded agreements with the Lithuanian Public Institution Innovation Agency on projects for business development and the acquisition of modern production equipment, including for powder coating and shot blasting metals. Both projects were valued at up to €885 000, with 45% of the costs being financed by EU funds and the remainder by the companies themselves. 

According to the investigation, however, the companies did not have the funding sources to respect their commitments. Evidence suggests that the suspects provided false data on loans, forged documents of equipment manufacturers and inflated equipment prices, in order to obtain the funds illegally and fraudulently avoid their obligations to provide funds to the projects.

The director of both companies, who is alleged to have acted together with other persons, received at least €343 000 in EU funds.

A total of 24 searches were carried in the suspects’ homes, cars and workplaces in Vilnius, Kaunas, Klaipėda and other cities, as well as in accounting companies that allegedly forged documents and concluded fictitious loan agreements. Accounting information, electronic communication tools and other objects were seized.

Five persons were arrested and served with suspicion notices of fraud, credit fraud and forgery of documents or the possession of such documents. Two of the suspects were former employees of an agency responsible for the allocation of EU funding.

In addition, a temporary restraining order was placed on the suspects’ property rights, amounting to €810 000.