Investigators bust suspected tech R&D fraud ring

European law enforcement authorities say 22 allegedly fake research projects have been involved in fraud worth almost £50m

European law enforcement authorities have concluded an investigation into suspected fake EU-funded technology research projects worth almost £50m, alleging that fictitious companies in the UK were involved in the apparent fraud.

Twenty-two allegedly fake technology research projects were subject to the investigation, the European Anti-Fraud Office (Olaf) said on Friday. "Our investigation... concerns networks of companies operating in several member states," Olaf deputy spokesman Johan Wullt told ZDNet UK.

The bogus companies allegedly used to siphon EU funds had deliberately opaque organisational structures and used techniques similar to those found in money laundering, Olaf said.

"Thanks to intensive co-operation over several years between Olaf, the European Commission, the Italian judiciary and Guardia di Finanza, a very sophisticated fraudulent network affecting the EU's research budget has been eliminated," Olaf director general Giovanni Kessler said in the statement.

A very sophisticated fraudulent network affecting the EU's research budget has been eliminated.

– Giovanni Kessler, Olaf

The Italian Guardia di Finanza said on Wednesday the network of real and fake technology companies extended across England, France, Greece, Austria, Sweden, Slovenia and Poland. The suspected aggravated fraud netted over €53m (£47m).

The alleged criminal conduct included the preparation of funding proposals showing false information, the reporting of non-existent or inflated costs by using false accounting documents relating to Italian and other companies, and the inclusion in reporting of 'researchers' who did not exist or were completely unaware of their alleged involvement.

The Italian authorities started their investigation in 2008 after a report by Olaf. Italian prosecutors have notified suspects of the charges against them.

European technology research funding is worth billions of Euros. Six finalists were recently announced in a scheme to win multi-million-euro funding for 10 years.


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