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
From his lips to his bald head, Harvey has to defends all sort of jabs.
56 minutes ago
The woman who gifted the painting to the owners had earlier sold it to another dealer as she couldnt sleep at night.
1 day ago
When it came to naming something of Harvey they would want to touch, the players didn't hold back
1 day ago
Rick Harrison's go to expert warned him not to touch it with a "10 foot pole."
1 day ago
The massive manufacturer has been operational for more than a hundred years now.
2 days ago
While the player was overwhelmed with emotion, host, Drew Carey was left hanging for a handshake.
4 days ago
Turns out, the guest's father was the renowned artist, Demetrios Jameson.
4 days ago
While the player, Rodney Flippen took the loss on the chin, fans were left heartbroken.
5 days ago
Harvey was stunned to see that Lisa would risk her marriage to get the top answer.
5 days ago
The outbreak has been linked to four deaths, and 19 hospitalizations, according to the CDC.
6 days ago
The President and CEO of Walmart, Doug McMillion expressed that AI will "literally change every job."
6 days ago
While the seller was confident that the instrument was ever so valuable, Harrison begged to differ.
7 days ago
The 54th season of the show has begun with a brand-new game, but fans fear it could be rigged.
7 days ago
The guest had absolutely no idea that the Ching Dynasty snuff bottle could be worth so much.
Sep 30, 2025
While Corey Harrison tried his best, the seller had other plans and stuck to it.
Sep 28, 2025
Harvey warned the contestant that she may be in a situation she can't handle.
Sep 27, 2025
In the end, the expert adviced the guest to put the item on a pedestal for the future.
Sep 27, 2025
Fans debated if the player got the correct answer in time, or if the judges the right call
Sep 26, 2025
While the comedian/host's answers were barely intelligible, Harvey didn't miss a beat to roast him.
Sep 26, 2025
When a player expressed her desires for Harvey, the host was more than happy.
Sep 26, 2025