Sorainen’s criminal law counsels follow the activities and successes of the European Public Prosecutor’s Office (EPPO) in Latvia and abroad with constant interest. We pay particular attention to cases where investigations have been carried out into fraud against European Union (EU) funds, which is undoubtedly one of the target areas of the Latvian law enforcement authorities.

Violeta Zeppa-Priedīte, Head of Sorainen’s Corporate Crime Investigations and Compliance Practice and associate Andīna Brīvule follow the latest developments in these and other areas of criminal law.

This time, our attention was drawn to the recent announcement by the EPPO that in June this year, the District Court of Budejovice in the Czech Republic convicted two individuals for subsidy fraud. Although we do not know the details of the case objectively, on the surface, it appears to be a simple and rather mundane case. However, it suggests that the fraud of EU funds, even in simple circumstances and on a relatively small scale, is in the sights of the law enforcement authorities.

The court found that the defendants had illegally obtained €125 000 in EU funds for a social entrepreneurship project. Between 2016 and 2020, the two made false declarations in their application for EU funding for the project, which aimed to produce natural cosmetics and perfumes and to employ young people from orphanages. Investigations by the Vysočina Regional Police Office revealed that the funding was not used for the declared activities and that the properties acquired with EU funds were transferred to one of the defendants.

Both defendants received suspended prison sentences and a financial penalty, and a ban on receiving subsidies. The damage of EUR 125 000 was fully recovered from one of the defendants in the course of the court proceeding.

The EPPO press release is available here.