The European Commission has uncovered a network of fake research projects that have fraudulently claimed ?50 million

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Italian authorities have exposed a vast web of phony research projects that stole more than Euro50 million (?44 million) from the European Commission. The projects, which ran across seven EU countries, covered a wide range of different topics, from road safety to healthcare.

A total of 22 projects are now under investigation for receiving EC funds fraudulently. The authorities have uncovered a network of companies and organisations, many of which turned out to be fictitious, based in the UK, France, Greece, Austria, Sweden, Slovenia and Poland. 

The European Anti-Fraud Office (OLAF) and the Commission have been working together with local authorities to fight a number of sophisticated frauds involving European research funding.  

Ill gotten gains

In another case of misappropriation of funds, researchers spent their ill gotten gains on Porsches

The research projects were cleverly designed so as to evade the Commission’s control mechanisms. They all passed peer review as their applications and goals were well presented and the consortia appeared to include organisations from the public and private sector. The projects’ organisers stand accused of falsifying grant applications, reporting inflated costs, false accounting and claiming money for researchers that did not exist or were completely unaware of their stated involvement. The authorities are still investigating how the research funding has actually been spent.  

In a previous case, researchers at several Greek universities stood accused of embezzling European research money to buy Porsches and fund lavish lifestyles. In this instance Euro150-200 million is thought to have been misappropriated.  

Although the investigation is still ongoing, the companies and organisations under suspicion have had their projects terminated and have been banned from applying for any future EC funding. Of the Euro50 million that has been allocated for the suspected fraudulent research, the EC has recovered Euro10 million and is seeking to recover the remainder through the courts.  

David Boublil, spokesperson for taxation, customs, anti-fraud and audit at the Commission, says he is satisfied that the fraudulent activity was spotted and the checks in place have ultimately worked, although this activity has clearly shocked him. ’The level of deceit and misrepresentation in this case goes far beyond anything previously experienced in the environment of research funding.’ 

Pavel Borkovec, a spokesperson for OLAF, agrees and compares the techniques used by the fraudsters to those of professional money launderers. As a result of the investigation, the Commission has updated their training of projects officers, guidelines for evaluation and payment and refined their IT systems. ’The Commission will continue to take strong action to detect and prosecute perpetrators of fraud by developing new detection and prevention mechanisms.’  

Leila Sattary