No Cypriots or Cypriot companies were implicated in an investigation by the European anti-fraud office, Olaf, relating to the alleged misuse of more than €400,000 provided by the Commission’s Research Executive Agency (REA) to a consortium of SMEs in France, Romania, Spain, and Ireland with the purpose of improving forest-fire detection but used for a casino/hotel project in Cyprus instead, the state Legal Service said on Friday.
In a written statement, the Legal Service said it had sought clarifications from Olaf after the story emerged last week that more than €400,000 provided by the Commission’s REA to a consortium of SMEs were misappropriated and used for a casino/hotel project in Cyprus. Olaf did not reveal the identity of the firms.
In a letter received by the Legal Service on Friday, Olaf “confirmed that it had not come into any contact with any authority in the Republic because none of the activities under investigation had taken place in Cyprus, nor did they involve Cypriot citizens or Cypriot companies.”
“Contacts were made with authorities in Ireland, Romania, Spain, and France while there was no evidence of any criminal or fraudulent activity in Cyprus,” Olaf said.
As the project progressed, REA had concerns that some claims for personnel costs submitted by the consortium might be false and reported these suspicions to Olaf.
Olaf, following coordination with the relevant national authorities, on-the-spot checks and digital forensic operations, concluded that the initial funding application and the subsequent progress reports by SMEs were based on lies and justified by false documents, and that the consortium of SMEs never had the operational capacity to carry out the project.
The in-depth investigation showed that the consortium members had simply siphoned off the vast majority of the EU funding foreseen for this environmental research project.
Most of the stolen EU money was diverted as far away from its intended purpose as could be imagined – being pumped into a casino/hotel project in Cyprus.
The investigation, that concluded in November 2019, recommended to REA to recover €410,000 from the consortium and asked the competent national judicial authorities to initiate judicial proceedings against the individuals involved.