Prison Sentence for UK Company Director Convicted of Fraud

OLAF /10/15 Brussels, 7 December 2010

On Friday 3rd December 2010, the director of Implants International Ltd was sentenced to 18 months imprisonment at Newcastle Crown Court, having pleaded guilty to two charges of fraudulent trading and theft of European Community funds totalling 284,000 euros. He was also disqualified from acting as a director of a limited company for a period of 15 years. The verdict is the second successful prosecution in recent months(1) for the United Kingdom's Department for Business Innovation and Skills (BIS) following referral of a case by the European Anti-Fraud Office (OLAF). The case demonstrates both a high level of cooperation between OLAF and BIS and a commitment to investigate and prosecute those who commit fraud against the EU budget.

OLAF's acting Director-General Nicholas Ilett welcomed the verdict, saying: "The effective cooperation between OLAF and BIS has resulted in a victory for EU citizens. We look forward to continuing our cooperation with the UK authorities in order to bring to justice those responsible for defrauding EU taxpayers."

The case concerned an EU research project aimed at improving the lifespan of orthopaedic devices for disabled people, which Implants International Ltd was coordinating. In May 2001, the European Commission made an advance payment of 284,000 euros to the company, the majority of which should have been distributed to research institutions participating in the project. However, the company retained the money and used it for his own purposes, prior to pulling out of the project in March 2002. In February 2005, the European Commission obtained judgement against Implants International Ltd at the Court of Justice in Luxembourg. Following an unsuccessful appeal, the company director was ordered to repay the principle sum of 284,000 euros, plus interest and costs. However, instead of repaying the money, Implants International Ltd was put into administration and the director formed a new company under the same name. He then purchased the old company's assets and transferred them to the new one.

OLAF opened an investigation in March 2007 and passed information to the BIS in April 2008. On the basis of this information BIS opened a criminal investigation. OLAF and European Commission officials subsequently provided evidence that was used in the trial. The director initially pleaded not guilty, but on the sixth day of his trial, 25 October 2010, changed his plea to guilty.

For more information see the press release from the UK's Department of Business Innovation and Skills (BIS) please see here:
http://nds.coi.gov.uk


OLAF

OLAF’s (European Anti-Fraud Office) mission is to protect the financial interests of the European Union, to fight fraud, corruption and any other irregular activity, including misconduct within the European Institutions. OLAF is part of the European Commission, but remains independent in its operational and investigative functions. It does not take instructions from any other EU Institution.

Pavel BOĊ˜KOVEC
Head of Unit Spokesman,
Communication, Public Relations
European Anti-Fraud Office (OLAF)
Rue Joseph II, 30 B-1049 Brussels (Belgium)
Phone: +32 2 296 72 00
Fax: +32 2 2998101
E-mail: olaf-press@ec.europa.eu

(1) http://ec.europa.eu/anti_fraud/press_room/pr/2010/08_en.htmlAll available translations.

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