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 guest had no idea about the item being a Tiffany product and being embedded with a rare gem.
10 hours ago
The host was baffled by the goof up that the contestant made between two words.
11 hours ago
Carey showed that he has got the weapon of sarcasm, and he isn't afraid to use it.
12 hours ago
Whatever the host was expecting, it was far away from what the contestant said on national TV.
13 hours ago
The guest was surprised to learn more about the item he had actually found on the street for free.
15 hours ago
After going through everything on the board, the player left Harvey in hysterics with his answer.
1 day ago
As it so turned out, the weird-looking floor lamp was a piece from a very famous studio.
1 day ago
Most contestants were consistently getting the answers wrong, and Harvey was worried about what was next.
2 days ago
Some claimed that they got the puzzle despite English being their second language.
2 days ago
The letter was written to a columnist in response to a piece taking a swipe at Sinatra.
2 days ago
In a special episode of Celebrity Family Feud, a WWE star decided to go for the one thing Harvey is known for.
2 days ago
Luck was shining for her as she was off to a flying start and won the car with a single card.
2 days ago
Sajak had a witty reply for the contestant who was fanboying over White during the game.
5 days ago
The model said that considering White's age she would also take the offer from Sony.
5 days ago
Sheila won a brand new entertainment unit, complete with an HD plasma TV and mini bar from Howard Miller.
6 days ago
The appraiser disclosed that Yoakum began painting in the 1960s and he created one unique piece of art every single day.
6 days ago
The entrepreneur also managed to get the sharks to taste the vegan alternative meant for pets.
6 days ago
Throughout the game Monica tried to calm her nerves by placing her right hand over her chest.
7 days ago
Harvey later realized that the contestant had a crush on him and they had a moment.
7 days ago
The host had warned the men in advance to not risk their marriage for some points.
Mar 24, 2025