The accountant, identified as the leader of the criminal organization that orchestrated a multimillion-euro fraud against the Public Sector, played a crucial role due to his expertise in navigating the necessary procedures and engaging with relevant authorities to approve fraudulent applications.
The scheme, which, according to the Hellenic Police, managed to “pocket” over 5 million euros, is detailed in the compiled case file.
Fraud Through 40 Companies
The investigation by the Financial Crimes Sub-Directorate revealed that the defendants established a network of 40 companies to siphon off public funds. They generated fictitious real estate lease contracts among these entities, artificially inflating rents without justification based on good faith and business ethics. This illegal operation involved 55 properties, including the defendants’ residences and even a courtyard.
The fraudulent nature of these contracts is evident when considering the prices of the rents alongside the properties’ characteristics, such as their objective values and sizes. For example, they reported renting a 57 sqm house in Nikea for 20,000 euros per month.
Moreover, the timeline of these contracts coincided with the economic downturn during the COVID-19 pandemic, underscoring their fraudulent nature. The declared purpose of these rentals—such as providing services for entertainment events—further highlights their illegitimacy. They exploited urgent measures aimed at controlling the spread of the virus by submitting false COVID claims to receive the inflated rents, ultimately seeking to defraud the Greek State for personal gain.
Interestingly, in attempts to carry out these fraudulent submissions that were ultimately rejected, they sometimes initiated legal actions against their real estate lease counterparts for non-payment of rents, attempting to mitigate other legal repercussions, including tax liabilities and audits by tax authorities.
In addition to COVID claims, they submitted false applications to various public bodies, misleading them with fictitious data. The network of companies was leveraged to enroll in Ministry of Development programs (such as NSRF), receiving subsidies or illegal aid through deceitful documents regarding turnover and available funds.
These forged documents included banking transactions and official records from AADE. A notable instance involved constructing a property—a villa—through an NSRF program under the pretext of using it for rental purposes, while it was actually occupied by two of the arrested individuals.
Additionally, the organization used individuals as straw men to transfer liability (civil, criminal, and administrative) and insured employees under various circumstances without paying the requisite insurance contributions, misleading EFKA regarding the true management and hindering the recovery of unpaid contributions.
Complexity was a key tactic in ensuring the organization’s continuous operation from 2020 to present, utilizing a range of virtual companies or individual entities as customers/suppliers to obscure their activities. The transactions executed through financial institutions further obscured investigations.
Specifically, the proceeds from their illicit activities circulated through this network of companies, mingling with legitimate business profits in the same bank accounts.
According to the Hellenic Police, the analysis of their banking activity disclosed numerous accounts belonging to different individuals and companies, alongside a significant volume of repetitive transfers between accounts intended to conceal the source of funds and disguise their illegal origins. In addition to the accounts held by the leading member and his companies, corporate bank accounts of other accomplices and their relatives were also utilized.
The diverted funds appeared to be reinvested into the companies through expanded legal activities (such as increasing corporate capital and property development), further entrenching their criminal network and facilitating additional fraud against the Greek State and the European Union.
They Operated 122 Bank Accounts
To legitimize their earnings, they created a complicated interbank structure comprising 122 accounts within their network of both real and virtual companies.
Through this network, they conducted at least 57,253 transactions, channeling money received from fictitious COVID property lease applications, repayable withdrawals, and NSF subsidies while consistently shifting funds between accounts to obfuscate their illegal origins and produce a facade of legitimacy.
Ultimately, the scheme’s members withdrew these funds, which were either allocated to luxury property developments or laundered back into other accounts within the company network to bolster corporate funds and facilitate further criminal activity.
This money was found to be recycled throughout the network according to the group’s objectives while simultaneously achieving a semblance of legitimacy. Notably, transfers between bank accounts of the involved companies and defendants reached at least 10,897,157 euros, with cash withdrawals totaling 13,042,601 euros, predominantly made by the defendants.
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