THE Garda has been asked by the European Commission to investigate the activities of an Irish-based company which has received £3.2 million tram the EU for research into hydroelectricity.
The company, which the Commission does not name, is alleged to have had no expertise or experience in the field of scientific research. The total sums involved were £7.2 million.
The Commission, in its annual report on fraud in the EU, records that three contracts were signed between it and the company between 1991 and last year when it carried out spot checks in the company's registered office in Dublin and in that of a Swedish sub-contractor.
The checks are alleged to have revealed that the company had artificially inflated its applications for funding using forged supporting documents. The initial application of the company was based on the records of another company.
Fraudsters cost the EU over £1 billion last year, up 10 per cent on the figure for 1995, according to the Commission's report. But the Justice Commissioner, Ms Anita Gradin, yesterday insisted that the rising figures were the result "of the huge efforts we have put into reorganising and improving the Commission's anti-fraud measures".
The figures show that in Ireland irregularities connected to the EU agricultural guarantee fund amounted to £5.6 million last year - of which all but £600,000 has been recovered. Of the £80,000 ink detected fraud against the structural funds, all but £3,200 was recovered.
Detected large-scale fraud has dramatically boosted the revenue of the overall EU budget. Customs duties and agricultural levies make up 17 per cent of EU income from member-states. In 1996, detected fraud in this area was £630 million, up 10 per cent on the year, to nearly 6 per cent of total revenue from these sources.
Ms Gradin said this type of fraud hit taxpayers directly as the national exchequer had to meet any shortfalls in customs income from general taxation.
The report puts the level of fraud against the Union's agricultural budget last year of £34 billion at £276 million or 0.8 per cent of every penny spent. The main culprits are market support and export refund schemes. The average budgetary impact of fraud by farmers is £12,000 per case, while for cases involving export refunds; the figure is £72,000.
The level of detected fraud against structural funds is put at 0.6 per cent of the £19 billion total. The larger cases concerned major infrastructural projects under the Regioan Fund where 88 cases involved £70 million.
The Commission records that the record for recovering money among member-states is poor with only a third of the amounts from cases before 1993 recovered so far.
The Commission itself investigated less than 5 per cent of the 4,500 reported cases of fraud. However, the monetary value of those cases added up to more than 50 per cent.
