OLAF and EPPO Uncover a Money Laundering and Fraud Scheme by Organized Crime

The European Anti-Fraud Office (OLAF), in collaboration with the European Public Prosecutor’s Office (EPPO), has started an investigation into a significant fraud and money laundering scheme with a 9.5 million Euros in impact.

OLAF’s investigation is followed by a request from the European Regional Development Fund (ERDF) regarding suspected money laundering and IT fraud in an IT development project in Romania.

OLAF and EPPO’s collaborative investigation involved the operational analysis of an IT platform developed under the EU projects. As part of the investigation, the organizations also did on-spot checks in Czechia and Cyprus.

Investigations revealed  sophisticated money laundering schemes involving a network of individuals and companies across the nations with detection of suspicious banking transactions across European and Non-European Nations.

An organized crime group has been found to be maneuvering the project through the use of private companies and taking advantage of the funding to launder proceeds from their criminal activities.

The criminals used fictitious contracts to move funds- A common strategy for money launderers to move the funds.

Shockingly,  the money laundering scheme which appeared to be an accidental act of fraud was a well thought-out plan to exploit EU taxpayer’s funds for criminal benefit.

The criminals also used multiple fictitious transactions spanning cross-border jurisdictions like Cyprus, Czechia, France, Germany, Hungary, Monaco, Romania, Russia, Ukraine, United Arab Emirates, United States.

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This is not the first time EU Anti-Fraud watchdogs have covered such cases. Back in November 2023, EPPO conducted 38 such searches. OLAF’s analysis of seized IT serves revealed that the same network had used a similar way to siphon off funds from another ERDF-funded project.

As per the press release, this fraud was a component of a wider, more extensive operation to embezzle public funds rather than a one-time occurrence.  Further allegations against the organized gang were brought up by deeper analysis gleaned from the confiscated IT servers.