NCOZ Arrest Three People Over Financial Fraud Worth More Than CZK 130 Million
According to a police spokesperson, investigators from the National Center against Organized Crime, in cooperation with the European Commission Public Prosecutor’s Office, have detained three people in relation to alleged financial fraud worth more than CZK 130 million. Photo Credit: CG / BD.
Czech Rep., Aug 16 (BD) – In January this year, the National Center against Organized Crime (NCOZ) received a report from the Ministry of Finance concerning suspicious circumstances related to a subsidy scheme amounting to approximately CZK 20 million. Following a thorough investigation into the activities of the grant applicant, experts uncovered evidence of a much larger case.
According to the NCOZ report, the applicant received subsidies from the EU and the Czech Republic government of almost CZK 130 million related to fictitious scientific projects, in 17 cases dating from 2011 to the present, and attempted to access a further CZK 130 million. Two other people are suspected of participating in the creation of false documents.
“To attract subsidies, the accused man set up a number of offshore companies under his control, which he then used to create fictitious offers and tenders. He then gradually transferred the funds obtained from subsidies to the offshore accounts he had at his disposal,” said police spokesperson Jaroslav Ibehej.
“Apart from the profits from subsidies, no other income of this person was found during the investigation. Also, no real activity performed by the person was found,” he added.
The man used most of the funds for his private spending, or for investments in property and other assets. As part of the criminal proceedings, assets worth more than CZK 60 million were recovered in bank accounts, real estate, and other property, including more than 1,000 models of railway trains worth millions of dollars, cars, and a digger.
According to Ibehej, “Three individuals are being prosecuted for the criminal offenses of damage to the financial interests of the European Union and subsidy fraud. In addition, the main offender is charged with laundering the proceeds of crime. In addition, criminal proceedings have been initiated against three legal entities. Two are charged with laundering the proceeds of crime and one legal person is being prosecuted for criminal offenses of damage to the European Union’s financial interests and grant fraud.”
“The main perpetrator was taken into custody by the court. The other two are being prosecuted at large. In the case of conviction, the accused face imprisonment for up to 10 years,” said Ibehej.
The NCOZ cooperated with the Financial Analytical Office, the General Finance Directorate and the Ministry of Industry and Trade on the investigation. As most of the funds obtained came from European Union sources, the European Commission’s Public Prosecutor’s Office (EPPO) took over the supervision of the screening.
This is the first case in the Czech Republic carried out as a cooperation between NCOZ and EPPO. Thanks to the deployment of the newly created European Supervisory Authority, it was possible to conclude the matter in a short time.