European prosecutor investigates possible subsidy fraud by Olomouc company

The European Prosecutor's Office in Luxembourg is investigating a possible subsidy fraud involving more than CZK 45 million at the Hopax company in Červenka, Olomouc. The company is suspected of artificially inflating the price of machines it bought with EU subsidies. The European prosecutor said that a plea bargain was being negotiated. The owner and managing director of the company, Jozef Pavlik, did not want to comment on the case until the outcome. The news server iROZHLAS.cz reported today.

"The Regional Police Directorate of the Olomouc Region, as part of the investigation conducted by the European Public Prosecutor's Office, has delivered a resolution on the initiation of criminal prosecution against one natural person and one company. They are accused of subsidy fraud and damage to the financial interests of the European Union, estimated at over EUR 1.8 million (CZK 45.8 million)," the European Public Prosecutor's Office wrote in a press release in early January. It included an anonymised photograph of the company's hall, from which the office removed the name and logo.

This is the third charge brought by prosecutors under the Luxembourg office during its tenure. Libor Hejtman, a spokesman for the Olomouc criminal investigators, confirmed to iROZHLAS.cz that they are dealing with the case. "Lawyers are in charge of the case and I do not want to comment on it until then," Pavlík, who was named the Olomouc Region's Businessman of the Year 2009, told the server.

Hopax manufactures steel structures and assembles halls at its hall in Červenec, which is part of an industrial complex near Litovel. The EUR 1.8 million subsidy was to be used to finance a new technology centre. In a press release, the European Public Prosecutor's Office said that the prices of the machines ordered had been falsely inflated and that the applicant had provided false and incorrect documents to obtain the additional money. "Discrepancies between the bids and the actual prices were discovered during an inspection by the Ministry of Industry and Trade," said David Hluštík from the ministry's press department.

Police and the prosecutor seized more than two million euros worth of real estate assets from the company, the server said. European prosecutor Pavel Pukovec, who is in charge of the case, admitted that an out-of-court settlement is also in play. "I won't specify the name of the company or the names of the accused persons because, on the one hand, we are in pre-trial proceedings and, on the other hand, we are also negotiating with the other side about the possible conclusion of an agreement on guilt and punishment," he said. In this procedure, the accused will promise in advance to plead guilty to the crime and the prosecutor will in return charge him with a less serious offence or propose a significantly lighter sentence because the cost of the proceedings will be saved. The plea bargain must then be approved by the court.

Source: iROZHLAS and CTK