The Southern District Prosecutor's Office has filed benefit fraud charges against construction entrepreneur Jaago Roosmann, former deputy mayor of Tartu Kajar Lember and six other individuals as well as eight companies. Lember is also accused of violating procedural restrictions and accepting bribes.
According to the statement of charges, the accused applied for various types of support from Enterprise Estonia and the Estonian Agricultural Registers and Information Board (PRIA) between 2006-2015 with the intention of facilitating the economic activities of several individuals and businesses or putting the funds to non-authorised use.
The accused received a total of €1.8 million of support for the development of 10 objects on altogether 36 occasions.
Lember sought to develop a personal business project on a property on Roosi Street in Tartu, and, in his capacity as deputy mayor, was connected to decisions made regarding the development of the property. Given his personal and economic interests in the project, Lember should have recused himself from the decision-making process,and in failing to do so committed a large-scale violation of procedural restriction.
The ex-deputy mayor is likewise accused of accepting and using a benefit offered to him as a bribe in return for financing the renovation of a stairway in the city from the city budget.
According to Margus Gross, special prosecutor at the Southern District Prosecutor's Office, Lember's possible corruption offences have attracted a great deal of public attention, however it is economic crimes that account for the lion's share of the offences of which he is accused.
"All but one of his episodes relating to benefit fraud are linked to construction entrepreneur Jaago Roosmann," Mr Gross said. "In order to deceive Enterprise Estonia and PRIA, the accused came up with various schemes, all of which served the same purpose — to inflate the price of the objects to a point where own contribution would not be required. On some occasions, the support received was put to non-authorised use."
Nearly €2 million in damages
According to the prosecutor, the group's benefit fraud resulted in total damages worth €1.8 million to the state.
"Economic crimes damage the economic environment and thereby also the interests of honest entrepreneurs and people," Mr Gross said. "By means of deceit, the accused obtained an advantage over businesses that genuinely needed support from Enterprise Estonia and PRIA and put in honest work to earn it. Thus, if the court agrees with the prosecution's assessment, in addition to causing damage to the state, the accused with their benefit fraud also damaged the business sector as a whole."
Working in a position as high as that of the deputy mayor of Tartu, Estonia's second largest city, one has to ensure that their activities are motivated by public interests and not personal gain, the special prosecutor said. "The position of the prosecution is that as deputy mayor, Kajar Lember had an interest in developing a personal business project, and he abused the public authority entrusted in him and did not duly remove himself from the process," he continued. "According to the charges, his corruption offences were committed prior to June 2016, when he expressed his wish to resign."
Ten properties and other assets in the amount of €1.5 million have been seized from the accused to secure the confiscation of assets obtained as a result of the alleged crimes.
The investigation was led by the Southern District Prosecutor's Office and conducted by the Economic Crimes Bureau of the Central Criminal Police.
Editor: Aili Vahtla