Hungary leads OLAF’s fraud statistics

The European Anti-Fraud Office (OLAF) would make Hungary repay almost 4 % of the EU funds the country had received between 2014 and 2018, according to the anti-fraud body’s latest report.

OLAF conclued the most investigations – into the use of EU funds managed or spent in whole or in part at national or regional level – in Hungary’s case. Seven of nine cases were closed with recommendations.

The reports mentions a case, when OLAF “received allegations concerning two closely related companies which had received European Regional Development Funds in order to implement two projects aimed at developing circular broadband networks in rural Hungary. The total value of the two projects, including the ERDF grant and the contributions of the two companies was approximately EUR 12 million. OLAF investigators discovered that both beneficiaries subcontracted 100% of the works to the same general construction company.

This contractor further subcontracted both jobs through a complex chain involving four layers. OLAF established that this complex chain was used to disguise the transfer of EUR 4.9 million back to one of the original beneficiaries in Hungary through a third party in another Member State.

In this way, the two beneficiaries created artificial circumstances in order to increase the project value and to receive undue EU funding. OLAF recommended that the European Commission Directorate-General for Regional and Urban Policy recover the misused amount of roughly EUR 3.6 million. OLAF issued a judicial recommendation to the competent national authorities to initiate criminal proceedings”.

Source: Hungary Journal

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