ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

Estonian Firm Charged With Subsidy Fraud in the Garb of IT Development; Here are the Allegations

Estonia charges five individuals and five companies with misusing EU co-funding in a 2018 IT project for a transport and e-commerce company.
PUBLISHED DEC 5, 2023
Image Source: Shape Charge/Getty Images
Image Source: Shape Charge/Getty Images

As the world embraces digitization and businesses also want to upgrade their infrastructure for the future, the need to develop an IT framework also opens doors to innovative fraudulent schemes. In a significant development, the European Public Prosecutor's Office (EPPO) based in Tallinn, Estonia, has initiated legal proceedings by filing an indictment in the Harju County Court. This indictment targets five individuals and five companies, accusing them of fraudulent activities related to a project aimed at developing IT systems. Notably, this project was co-funded by the European Union (EU).

Image Source: Boonchai /Getty Images
Image Source: Boonchai Wedmakawand /Getty Images

The roots of this alleged fraudulent activity can be traced back to the year 2018, when a company with expertise in transport, warehousing, and customs services within the e-commerce industry submitted an application to Enterprise Estonia (EAS), the national agency responsible for awarding and disbursing EU funds. The application sought a subsidy from the European Regional Development Fund to support the creation of an IT program and the execution of IT development activities. These IT initiatives were intended to enhance the company's value-added sales and marketing strategies by providing an end-to-end service.

The total cost of this project was approximately $784,500, with EU funds contributing around 45% of this amount, which is equivalent to roughly $351,600, while the remaining project expenses were covered by the company.

To secure the EU funding, the recipient of the funds submitted invoices and documentation that purported to show that payments had been made to other service providers using the company's resources. But, an investigation revealed that these payments were never actually executed.

Instead, the evidence shows that the recipient redirected the money to affiliated companies while issuing false invoices to fabricate the appearance of legitimate commercial transactions. This deceptive strategy was designed to mislead the agency responsible for managing the funds. Ultimately, it was discovered that the money ended up being returned to the firm or to companies that were under the control of the beneficiary.

Image Source: SOPA Images/Getty Images
Image Source: SOPA Images/Getty Images

In light of the fraudulent activities uncovered, the legal representatives of the company that received the funds and the company itself are now facing charges of subsidy fraud. Three other individuals and four companies have also been charged as accomplices to the fraud. If convicted, the defendants face prison sentences of up to 5 years, while the companies may be slapped with pecuniary penalties.

The preliminary investigation into this case was conducted by the Department of Cyber and Economic Crimes of the Criminal Bureau of the Estonian Police and Border Guard Board, under the direction of the EPPO.

Image Source: Boonchai Wedmakawand/Getty Images
Image Source: Boonchai Wedmakawand/Getty Images

Earlier in the course of this investigation, in May 2023, searches were conducted at the residences of the suspects and the locations of the companies involved, in which substantial documentation was seized. The initial court hearing for this criminal case is scheduled to take place in the Harju County Court on November 14, 2023.

The EPPO, as the independent public prosecution office of the European Union, has a mandate to investigate, prosecute, and bring to justice crimes against the financial interests of the EU.

MORE ON MARKET REALIST
The couple initially ignored the bills but panicked when more of them flooded their mailbox.
2 hours ago
Small details such as the identity of the author and the date when it was printed need to be checked.
3 hours ago
She will continue as the co-host with Ryan Seacrest who has replaced Pat Sajak as the main host.
4 hours ago
Other customers in the thread also shared how they have seen such drawings on receipts.
6 hours ago
The man's daughter mentioned how he also paid for gas, water, and power, to make sure his wife wouldn't need to.
7 hours ago
Grant Cerwin sent an email to Craig Jelinek asking if Costco could donate one of the famous 93-inch teddy bears for his middle school fundraiser in LA.
18 hours ago
The man said that his girlfriend often tosses clothes into the washing machine without checking their pockets.
1 day ago
The A-list actor was extremely happy with the food and blessed her and her family.
1 day ago
The video has gone viral and people are responding with their own scary experiences at ATMs.
1 day ago
The organization asked Simmons' employers to send a deserving candidate and they nominated her.
1 day ago
A "gift from God," Otha Anders started collecting pennies after he found one lying on the ground.
1 day ago
Perks of the job also include year-long subscriptions for all major streaming services.
2 days ago
The TikToker turned out to be a philanthropist who has dedicated his life to make dreams come true.
2 days ago
The parents were surprised when they found a note written in response to the child's gesture.
2 days ago
The woman got an email that looked authentic with the transaction platform's logo at first.
3 days ago
The child was putting items in the shopping cart but then suddenly started unloading it.
3 days ago
The man was finally able to pay off his debt and spend time with his family in Florida after years.
3 days ago
The guest got emotional since the family hadn't seen much wealth for generations.
4 days ago
Apart from the hip-hop legend, NBA star Kyrie Irving was another celebrity among the donors.
4 days ago
Jaime Siminoff, whose pitch was rejected by all but one shark, walked out without a deal. He returned to the show as a millionaire investor.
4 days ago