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(Luxembourg, 14 June 2024) – At the request of the European Public Prosecutor’s Office in Ostrava (Czechia), 15 searches were carried out on 11 and 12 June, in a probe into concert production companies suspected of several instances of subsidy fraud and tax evasion.
More than 150 law enforcement officers carried out searches in the cities of Chrudim, Prague, Přerov, Ostrava and Uherské Hradiště, at the suspects‘ homes and at the premises of companies under investigation.
On the radar of the EPPO are two companies providing equipment for music events. The companies, owned by the same individual, obtained EU funds from the Operational Program Enterprise and Innovation for Competitiveness, under the European Regional Development Fund, to purchase equipment for the production of concerts, including stages, audio-visual equipment and trucks. However, according to the investigation, the beneficiaries of the funds simulated the required public procurement procedure, which did not take place, and used a chain of companies to hide the origin of the equipment and to inflate its price. It is also alleged that the suspects evaded the payment of VAT on some of the purchases.
The suspects are also being investigated for falsely declaring training activities and employment of persons, in order to benefit from subsidies from the European Social Fund.
In addition, they are suspected of illicitly obtaining subsidies aimed at supporting companies during the Covid-19 pandemic, funded by Czechia’s subsidy program Culture, by presenting falsified expenses and false information about the turnover of the companies.
The estimated damage of the illicit activities under investigation amounts to over € 1,1 million (CZK 29 400 000), of which approximately €513 000 (CZK 12 672 746) came from the EU budget.
During the searches, law enforcement agents seized cash, bank accounts and three trucks, as well as audio and video equipment, worth a combined total of approximately €365 000 (CZK 9 000 000).
Eight individuals and six companies are suspected of being part of the scheme. Three individuals face criminal charges with sentences ranging from five to 10 years’ imprisonment, while the rest face sentences ranging from two to eight years.
The investigation and the searches counted on the support of the Czech Police (Policie České republiky) – the Regional Police Directorate of the Olomouc Region (Krajské ředitelství policie Olomouckého kraje).
All persons concerned are presumed to be innocent until proven guilty in the competent Czech courts of law.
The EPPO is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.