The European Agency reported that in recent years, it has revealed a trend among scammers to create fake companies participating in tenders, to conceal operations in order to obtain EU funds, and it notes the growth of fraud in the promotion of agricultural products. In particular, the attention of investigators was attracted by the scheme, which was used by the attackers to fraudulently obtain funding from the EU "to promote EU dairy products in Europe and in third countries".
According to the report, which was reviewed by RIA Novosti, the scheme was that "the performers, acting through a Brussels company and through a network of front companies, appealed to trade associations to help them secure EU funding". At the same time, they offered a turnkey solution, promising "successful approval of their applications, as well as practical support for their future implementation". The scammers were even willing to provide a financial guarantee and lend a fee.
"Thus, some associations of agricultural producers received EU funding to organize activities to promote agricultural products in Europe and in third countries such as the United Arab Emirates, Russia, Australia, Kazakhstan and Ukraine", the OLAF report said.
However, the fraudsters created a network of front companies under their control, which performed "the functions of bidders, suppliers, and the Executive body for the beneficiaries." Scammers colluded with commercial partners and manipulated tender procedures. Front companies, which had neither premises nor employees, were used to "inflate prices for services that were only partially provided or not provided at all".
"The money received was laundered through Bank accounts in Europe and in third countries such as Ukraine and the British Virgin Islands", the document says.
As a result of the investigation, the EC office for agriculture and rural development was advised to return 7.7 million euros to the budget and not to issue an additional 7.3 million euros for a number of projects.