Latvia Detains 21 in EU Funding Fraud Investigation
Riga, Latvia – Latvian authorities have arrested 21 individuals, including state officials, on suspicion of large-scale fraud involving European Union funding allocated for IT procurement and agricultural projects. The investigations, led by the Latvian State Police and overseen by the European Public Prosecutor’s Office (EPPO), reveal a coordinated effort to manipulate public procurement processes for personal gain.
IT Procurement Fraud
On March 18th, the Latvian State Police detained 21 people suspected of involvement in a scheme to fraudulently obtain €1.5 million in EU funding earmarked for IT systems by state institutions. The EPPO investigation established that an organized group entered into a secret agreement to predetermine the winners of at least six public procurement projects funded by the European Regional Development Fund (ERDF) [Source: EPPO].
Authorities allege that the group conspired to award project assignments to pre-selected companies, sharing the illicit profits among themselves. The involvement of public officials in securing these contracts unlawfully is also under investigation [Source: LSM]. A substantial amount of evidence was seized during 67 searches conducted in Riga and the surrounding region, including from the State Digital Development Agency [Source: EPPO].
Jorens Liopa, the former director of the State Digital Development Agency, is among those detained. He was previously downgraded due to infractions related to information technology processes during municipal elections and currently holds the position of deputy director at the Nature Conservation Agency, from which he has been suspended [Source: European Interest].
Agricultural Fund Fraud
In a separate case concluded on March 20th, the EPPO secured a conviction at the Riga City Court for procurement fraud involving EU agricultural funds [Source: EPPO]. The case centered on a project to reclaim agricultural land and reconstruct an amelioration system, funded by the European Agricultural Fund for Rural Development (EAFRD) and managed by the Latvian Rural Support Service, resulting in damages of €95,803.67.
The investigation revealed collusion between the project beneficiary and another operator to manipulate the procurement process, ensuring a pre-selected company won the contract. However, the beneficiary ultimately carried out the perform using its own resources, violating procurement regulations. Both individuals involved were found guilty of large-scale fraud.
Ongoing Investigations and Potential Security Risks
The EPPO is responsible for investigating and prosecuting crimes against the financial interests of the EU [Source: EPPO]. Authorities have indicated that the implementation of some of the IT projects involved in the alleged fraud could pose potential state security risks, potentially impacting elections and democratic procedures [Source: EPPO].
All individuals concerned are presumed innocent until proven guilty in the Latvian courts.