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(Luxembourg, 31 January 2024) – The European Public Prosecutor’s Office (EPPO) in Iași (Romania) brought charges today against six individuals and six companies for aggravated fraud and money laundering, in an investigation into a suspected criminal organisation that obtained €4 million in EU funds for medical and IT research.
The case concerns two projects to purchase medical and IT equipment and software licences, financed up to 70% by the EU. One of the projects aimed at establishing a research department for the treatment of neuro-motor diseases, and the other to develop innovative software programs for combating the illegal trafficking of goods.
According to the EU financing contracts, the beneficiaries had to provide proof of payment of their private contribution, amounting to 30% of the value of each invoice issued by the suppliers of the equipment, and only afterwards were they entitled to obtain the payment of the remaining 70%. However, according to the investigation, the suspects simulated the procedure for granting the acquisition contracts for the necessary equipment, in order to award them to a company under their control, which did not have the capacity or resources to purchase it. In addition, the suspects are believed to have used another company under their control to produce invoices with significantly inflated prices (approximately three times the real price). It is alleged that, in order to certify the payment of their private contribution, the suspects set up simulated circuits of payment for each invoice, depositing cash into the accounts of the beneficiaries, transferring the payment of the equipment to the accounts of the supplier under their control and later withdrawing it in cash for their own benefit.
The members of the group are also suspected of having forged documents to certify that the equipment had been purchased and was functioning properly. In most cases, according to the evidence, the equipment was purchased at a much later date, after the undue receipt of the payments from the managing authority of the EU funds.
According to the evidence, part of the illicit profits was used on leisure activities and international travel of the suspected ringleader to several Member States, as well as the maintenance of a power-yacht. In order to recover the damage to the EU budget, earlier in this investigation, real estate of the suspects was seized, amounting to €8.5 million.
Under Romania’s national legislation, aggravated subsidy fraud is punishable with up to ten-and-a-half years of imprisonment, and up to ten years for money laundering.
The European Public Prosecutor’s Office (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.