By Dan Byrne for AMLi
EUROPE must closely monitor the distribution of €750BN in COVID-19 recovery funds to ensure it is not siphoned off in money laundering rackets and fraud, a senior Europol official has warned MEPs.
Head of the European Financial and Economic Crime Centre Burkhard Muhl warned that corrupt individuals would try and access the recovery funding for their own personal gain and that closer cooperation between EU agencies to combat this was essential.
The bloc’s new AML Authority (AMLA) must also work closely with police to tackle the expected “wave of fraud” that will accompany the injection of funds into Member States, he said.
Speaking to the European Parliament, Mr Muhl described the recovery aid – commonly known as the Next Generation Fund –as an “unprecedented effort” to get the bloc moving again following eighteen months of disruption.
“It is therefore imperative to prevent and counter any criminal action to ensure that the large scale of funds provided by the union reach and fulfil its intended destinations and objectives,” he warned.
He announced that his organisation will ramp up its cooperation efforts with other relevant bodies.
In particular, he mentioned the European Anti-Fraud Office (OLAF) and the brand new European Public Prosecutor’s Office (EPPO), which only became fully operational this year.
The EPPO would have a “clear role,” in prosecuting criminal offences related to COVID-19 relief fraud, he told Parliament.
Meanwhile, OLAF and Europol have already begun working together on a recovery task force, he added.
“Our mutual cooperation according to the respective mandates, is advancing well and we have the legal tools to put it into practice,” he said.
Earlier this month, Europol, the EPPO, OLAF and Eurojust announced the beginning of Operation SENTINEL, a programme designed specifically to share information and coordinate efforts to root out individuals exploiting COVID-19 relief.
“I would like to highlight that Europol has already started working in this operation and we will have this operation running initially for one year,” he told Parliament.
European efforts to stop fraudsters acquiring and laundering recovery funding are now more closely aligning with similar efforts in the United States.
There, the Department of Justice has been working since mid-2020 to track and prosecute any individual suspected of exploiting initiatives like the paycheque protection programme and unemployment insurance.
By March 2021, over $569M worth of relief money had been traced to fraudsters, and nearly five hundred people were arrested.
Attorney General Merrick B. Garland described the achievements as “historic,” and said they demonstrated that the US government was “committed to protecting the American people and the integrity of critical lifelines provided for them by Congress.”
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