A Lithuanian court has found two Belarusian citizens, a father and son, as well as a company they controlled, guilty of fraud involving a European Union subsidy. The case concerns a project to develop high-precision satellite navigation receivers for agriculture.
An investigation by the European Public Prosecutor’s Office (EPPO), codenamed “Precision,” uncovered links between the defendants and the Russian and Belarusian military industries. A number of entities associated with them are subject to EU sanctions.
The case concerns a company registered in Lithuania that received EU funding to develop professional satellite navigation receivers capable of using the Galileo High Accuracy Service. The equipment was intended for use in agriculture, including the navigation of agricultural machinery and precision farming technologies. The project’s total budget was 1.064 million euros, of which 745,500 euros was to be provided by the European Union Agency for the Space Programme (EUSPA). The company actually received 447,272 euros.
To receive the funding, the company was required to submit a declaration to EUSPA stating that it was not subject to EU sanctions and had no links to sanctioned individuals or entities.
The company was established in Lithuania and was initially owned and managed by the defendants. In April 2022, shortly after the start of Russia’s full-scale invasion of Ukraine, a relative of the defendants who holds US citizenship and a Lithuanian citizen formally became its owners and managers.
The investigation found that the father and son continued to exercise effective control over the Lithuanian company. At the same time, they held senior positions in a Russian company involved in the development and testing of satellite navigation chips for military purposes that is subject to EU sanctions.
One of the defendants obtained Russian citizenship in 2020-2021. In addition, he held significant stakes in other companies with direct or indirect links to entities involved in military programs and cooperating with the Russian and Belarusian defense industries. Many of these entities are also subject to EU sanctions. In one Russian company, the Belarusian held a controlling stake, while a significant share was owned by a former high-ranking Russian state security official.
Investigators concluded that by submitting a false declaration denying links to sanctioned entities, the defendants gained access to EU funding, the European market and geospatial data.
The defendants pleaded guilty and repaid 447,272 euros in damages to the EU. The court found them guilty of subsidy fraud committed as part of a group, as well as document forgery and the use of forged documents.
The son was initially fined 36,000 euros. Under a simplified procedure, the fine was reduced by one third. In addition, the court credited the 73 days he spent in custody against the sentence at a rate of 300 euros per day. As a result, he will have to pay 2,100 euros.
The father was fined 34,500 euros, which was also reduced by one third. Taking into account one day spent in custody, the final amount was 22,700 euros.
The company controlled by the defendants was fined 36,000 euros, which was reduced by one third to 24,000 euros.
European Chief Prosecutor Laura Kövesi said the “Precision” case demonstrates the effectiveness of investigations into the circumvention of EU sanctions.
“‘Precision’ demonstrates EPPO’s speed and efficiency in cases involving the circumvention of EU sanctions. This case took us roughly a year from initiation to conviction. It also highlights a very sensitive EU policy area, in which due diligence and preventive measures should be strengthened as a matter of priority. In a broader perspective, it raises the question how EU procurement rules could render criminal infiltration more difficult. Finally, ‘Precision’ makes the case for the extension of EPPO’s competence to the circumvention of EU sanctions. The criminal law response to such attempts must become much more dissuasive than it currently is,” the European Public Prosecutor’s Office press service quoted her as saying.
Lithuania’s Financial Crime Investigation Service participated in the investigation.
