EPPO Lithuania: Charges 12 Over •1.3M EU Funds Fraud

• The European Public Prosecutor’s Office in Lithuania has charged twelve individuals with fraud and document forgery related to two EU-funded projects.
• The alleged schemes caused over €1.3 million in damage and involved an attempt to secure an additional €500,000 in funding.
• Lithuania’s Financial Crime Investigation Service conducted 25 searches and interviewed 64 witnesses as part of the investigation.
• One project involved forged training participant lists, while the other saw alleged non-compliance and misuse of over €1 million in disbursed funds.
• Assets totaling approximately €15 million belonging to the suspects have been frozen, and two individuals are in pre-trial detention.

Compliance officers and legal counsel advising organizations engaged in such projects, especially in Lithuania, must therefore reinforce documentation protocols and ensure strict adherence to grant conditions to mitigate fraud risks and avoid severe legal repercussions.

The European Public Prosecutor’s Office (EPPO) in Vilnius, Lithuania, has formally charged twelve individuals following an extensive investigation into alleged fraud and document forgery linked to two distinct EU-funded projects. The charges stem from suspected illicit activities that are estimated to have caused financial damage exceeding €1.3 million. Furthermore, the accused are believed to have attempted to secure an additional €500,000 in funding, which ultimately was not disbursed. This significant action by the EPPO highlights a concerted effort to combat financial irregularities within EU-supported initiatives.

The comprehensive inquiry, led by Lithuania’s Financial Crime Investigation Service (FNTT), involved a substantial operational deployment. One hundred FNTT officers conducted 25 searches across four Lithuanian counties: Klaipėda, Kaunas, Marijampolė, and Vilnius. In addition to these searches, investigators interviewed 64 witnesses to gather evidence pertaining to the alleged schemes. These EPPO Lithuania EU funds fraud charges underscore the serious nature of the accusations and the thoroughness of the investigative process.

The first project under scrutiny, initiated in 2019 by a company based in Klaipėda, was designed to provide professional training for 180 employees over a two-year period, aiming to enhance their qualifications and work-related competencies. This initiative received funding through Lithuania’s 2014–2020 European Union Funds Investment Action Programme. Investigators suspect that forged documents, including fabricated lists of training participants, were submitted to justify payment requests, resulting in nearly €270,000 in alleged damage to the EU budget. This constitutes a clear case of EU-funded projects document forgery.

The second project, launched in June 2024 and slated for completion by December 2026, focused on developing prototypes for transparent, fully recyclable plastic film engineered to prevent oxygen ingress, thereby protecting packaged goods. This venture was jointly financed by EU Structural Funds and the Lithuanian state budget, with an estimated total value exceeding €1.5 million. Over €1.07 million had already been disbursed to the project implementers. The ongoing EU structural funds fraud investigation uncovered indications that the project activities either were not executed as planned or failed to adhere to the approved conditions. Furthermore, transfers of the received grant money between companies and individuals associated with the primary company were identified, pointing to suspected misuse of project funding. The accused are also alleged to have attempted to obtain the additional €500,000 in funding that was not paid for this project.

The European Public Prosecutor’s Office (EPPO) operates as the European Union's independent public prosecution body, tasked specifically with investigating, prosecuting, and bringing to judgment crimes that affect the financial interests of the EU. This mandate empowers the European Public Prosecutor's Office Lithuania to take decisive action against fraud involving EU funds, as demonstrated in this case. The collaboration with the Lithuania Financial Crime Investigation Service (FNTT) was crucial in uncovering the alleged illicit activities and gathering the necessary evidence for the charges.

In response to the severity of the allegations, significant enforcement measures have been implemented. Assets belonging to the twelve suspects, with an estimated value of approximately €15 million, have been temporarily frozen to prevent their dissipation and potentially recover damages. Additionally, two of the suspects have been placed in pre-trial detention for a period of two months, reflecting the gravity of the accusations. It is important to note that, in accordance with legal principles, all individuals involved are presumed innocent until their guilt is established in the competent Lithuanian courts of law.

These EPPO Lithuania EU funds fraud charges send a strong signal regarding the rigorous oversight of European Union financial allocations. The alleged schemes, particularly the Lithuania 2014-2020 EU Funds Programme fraud and the misuse of EU Structural Funds, highlight vulnerabilities that the EPPO is actively working to address. The scale of the alleged damage, exceeding €1.3 million, coupled with the attempt to secure further illicit funding, underscores the persistent threat of financial crime against the EU budget.

For entities involved in EU-funded projects, this case serves as a critical reminder of the imperative for stringent compliance and robust internal controls. The EPPO's proactive approach, including the freezing of €15 million in assets and pre-trial detentions, demonstrates a clear commitment to aggressive enforcement. Compliance officers and legal counsel advising organizations engaged in such projects, especially in Lithuania, must therefore reinforce documentation protocols and ensure strict adherence to grant conditions to mitigate fraud risks and avoid severe legal repercussions. The integrity of EU funding mechanisms depends on such vigilant enforcement and adherence to regulations.

Compliance officers and legal counsel advising entities involved in EU-funded projects, particularly in Lithuania, must reinforce internal controls and documentation protocols to mitigate fraud risks and ensure strict adherence to grant conditions, given the EPPO's aggressive enforcement and asset freezing actions.

Source: Original reporting via EPPO press release