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(Luxembourg, 8 January 2024) – The European Public Prosecutor’s Office (EPPO) has carried out 31 searches in several locations in Lithuania and detained nine suspects, in connection with an investigation into the development of an environmentally friendly cling film, co-funded by the EU.
The searches, which involved more than 50 agents from Lithuania’s Financial Crime Investigation Service (Finansinių nusikaltimų tyrimo tarnyba), took place in the city of Vilnius and in the surrounding region, as well as in the cities of Kaunas and Šiauliai. The investigators seized cash (€63 600 and USD 7 832), 12 laptops, 21 mobile phones, USB storage devices and SIM cards, as well as documentation relevant to the investigation of a possible crime.
The investigation concerns a company that was awarded EU funds to develop technologies to produce biodegradable cellulose cling film, in order to replace polyethylene film, thus contributing to the EU’s objectives of sustainable development and the creation of a green economy. The project costs amounted to over €5.6 million, of which €2.7 million was to be financed by the EU, and the remainder by the company’s own funds.
The pre-trial investigation was carried out in close cooperation with Lithuania‘s Innovation Agency (Inovacijų agentūra), responsible for managing EU funds, and counted on the support of the Financial Crime Investigation Service.
According to the investigation, the suspects submitted a proposal to the Innovation Agency for the purchase of equipment required for the project, at a significantly inflated price. They claimed that the equipment would be purchased from an Estonian company. However, according to the evidence, this transaction was fictitious, as the Estonian company was not active, and the equipment was actually purchased from Belarusian and Chinese manufacturers, through a company owned by one of the suspects. In addition, the purchase price of the equipment may have been falsely inflated to more than €4.5 million, so that the suspects could make an undue profit – and thereby avoid contributing to the project with the company’s own funds, as was required.
The evidence gathered also suggests that, in order to demonstrate that the company had the means of contributing to the project, the suspects may have concluded a fictitious loan agreement of €3 million with a Swiss company, which is understood to be controlled by one of the suspects through another person.
Thanks to the investigation, the payment of the funds was suspended, preventing a potential damage to the EU budget of over €2.7 million.
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.