Cyprus Mail
Cyprus

Police reopen ‘cowboys’ fraud case

By Elias Hazou

POLICE have reopened a criminal case dating back seven years and relating to suspected defrauding of EU funds for agricultural programmes, implicating among others, the Pancyprian Organisation of Cattle Farmers (POA).

The case was put on the backburner in 2012 by then Attorney-general Petros Clerides, but reopened last year by the current Attorney-general, Costas Clerides.

A Cypriot woman was recently arrested in Belgium on charges relating to misuse of thousands of euros in public funds from Cypriot cheese products.

The European Anti Fraud Office (OLAF) and Belgian authorities arrested a woman identified as Stella Skarli, CEO of Agropromotion Sprl company, who is considered a key suspect in the case.

In 2008 Skarli’s company had won a public bid to manage a European funded programme in collaboration with POA.

It’s understood that Skarli’s husband, considered by authorities to be the mastermind in the scheme, has also been arrested in Greece in connection with other similar scams relating to EU-funded programmes.

Skarli was picked up by Belgian authorities on suspicion of involvement in other fraud cases. On searching her house, Belgian police discovered documents pertaining to the Cyprus-related case.

Police here are liaising with their Belgian counterparts to obtain access to those documents.

The alleged made-in-Cyprus scam, dating back to 2008, involved the drawing of European funds for an information and promotion programme on milk and dairy products, which were to be promoted in Russia and Ukraine.

POA had called a tender — shared with their counterpart agricultural agency in Bulgaria — and the contract for executing the promotion programme was awarded to Agropromotion Sprl, a Belgium-based company.

The programme’s initial budget was just under €5m.

But on checking the books of the Cyprus Agricultural Payments Organisation (CAPO) – the local liaison for disbursing the programme funds – the then Auditor-general discovered a discrepancy between the invoices issued by POA – the assigning authority – and payments made into the programme by CAPO.

The Auditor-general came to suspect that EU and Cyprus were being defrauded – the programme was partly funded by the Cypriot state – and alerted the Attorney-general’s office. The latter instructed police to launch a criminal investigation.

In 2011, police determined that the tender put out by POA was highly circumspect, as the person who evaluated the bids for POA was found to be the son of a consultant working for the successful bidder, Agropromotion Sprl.

Police also uncovered that POA’s representative, a Greek national by the name of Alexandros Filaretou, was the husband of Stella Skarli, the CEO of Agropromotion Sprl.

Having secured a warrant lifting banking confidentiality, authorities subsequently found that a large part of the monies paid into Agropromotion’s account – some €2m in total – ended up with companies in Cyprus and abroad owned by Filaretou, who also went by the name of Alexander Hedersven.

It further emerged that between December 2009 and June 2010, hundreds of thousands of euros were withdrawn from Hedersven’s bank account in Cyprus. Some of the withdrawals were made by Hedersven himself, others by the chairman and the general manager of POA.

Hedersven had fled the island by that time. Police here arrested POA’s chairman Savvas Evangelou and the organisation’s general manager Nikos Papakyriakou.

The two appeared in court in 2011 and were remanded in custody for three days. In 2012, the Attorney-general decided to suspend the case, having determined that additional evidence was needed to proceed.

Evangelou and Papakyriakou retain their positions at POA to this day.

POA’s email is: [email protected]

The case never went away completely, and in the summer of 2014 Attorney-general Costas Clerides decided to re-open it.

The affair was rekindled this Tuesday at the House watchdog committee, which was reviewing the Auditor-general’s 2014 report on semi-governmental organisations, specifically the Agricultural Payments Organisation (CAPO).

At the session, AKEL MP Irini Charalambidou charged that the thus far failure to pursue the case was proving an embarrassment for Cyprus, whereas Belgian authorities and OLAF were doing their bit, investigating a number of companies and individuals across Europe.

Charalambidou went on to hint that certain of the Cypriot suspects have family ties to people inside the Attorney-general’s office handling the case.

Asked about this by the Cyprus Mail, the MP declined to elaborate, but stressed she is confident of her allegations.

“I am not a detective. It is up to the Attorney-general’s office to clean up shop,” she said.

 

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