(Luxembourg, 24 March 2025) – The European Public Prosecutor’s Office (EPPO) in Tallinn (Estonia) has brought charges against five individuals and three companies, in connection with financial support for the development of the WOW Experience Centre, and a padel centre, located on the island of Saaremaa. The charges include three instances of subsidy fraud and forgery of documents and one attempt of subsidy fraud, with an overall estimated damage to the EU budget of approximately €1.6 million.
The facts date back to 2018-2020, when a company applied to obtain support for the construction of the WOW Experience Centre’s building from the Estonian Business and Innovation Agency, the national agency responsible for awarding and paying EU funds. In order to receive the EU funding, the company (hereafter, the beneficiary of the funds) had to submit at least three price offers prepared by independent bidders.
However, according to the investigation, two board members of the beneficiary of the funds colluded with the manager and a board member of a company that had been predetermined as the winner for the provision of the services. They also agreed with another company’s board member that he would submit a simulated price offer – thus misleading the paying agency. The beneficiary of the funds and the company providing the services also allegedly presented false information regarding the construction costs of the building, including the amount of eligible costs and self-financing.
The beneficiary of the funds later applied for another subsidy for the construction of the WOW Experience Centre’s exposition, checkout, cafe and kitchen and other furnishings. The evidence shows that they manipulated the mandatory public procurement procedure, in order to benefit a third company.
The beneficiary of the funds is also accused of a third instance of subsidy fraud, in connection with an application for support to buy kitchen equipment and solar power plant equipment for the WOW Experience Centre. Under the rules for financial support, the beneficiary must keep any items acquired with the aid for a minimum period of five years. However, according to the investigation, the equipment was sold to a leasing company, leasing it back immediately. This was not in line with the rules and according to the accusation, constitutes a misuse of subsidy.
Besides these three instances of subsidy fraud, charges have also been brought for attempted subsidy fraud, in connection with an application for the construction of a padel centre, funded by the Agricultural Registers and Information Board. Based on the evidence, the beneficiary of the funds and the other defendants colluded to manipulate the procurement procedure for the contract to be awarded to a preferred company.
The predetermined winner for the construction work was the same company as in the case of the building of the WOW Experience Centre. However, the payment of the funds was not made, because representatives of the paying agency became aware of the evidence collected in criminal proceedings about collusion and subsidy fraud in previous applications.
The investigation into the WOW Experience Centre and the padel centre led to the indictment of five individuals and three companies. Additionally, during the investigation, one company and four individuals agreed to pay a fine between €2 500 and €40 000 to the State budget. The investigation against these five suspects was terminated and simplified procedure was applied according to Article 40 of the EPPO Regulation.
If found guilty, the defendants face up to 5 years’ imprisonment for subsidy fraud. The companies incur the payment of a fine up to €40 million.
In order to compensate the damage to the EU budget, in 2023 the EPPO seized property from one of the accused companies, worth approximately €380 000. The court also granted a mortgage on the property of the beneficiary of the funds (now bankrupt), worth over €1.6 million.
All persons concerned are presumed innocent until proven guilty in the competent Estonian 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.