One more suspect detained in Georgia over large-scale fraud case involving state funds

The Investigation Service of the Ministry of Finance of Georgia has arrested another individual in connection with a large-scale fraud scheme involving state-owned funds, Deputy Head of the department Guga Tavberidze announced on Monday.

The arrest, carried out on October 24 in coordination with the Prosecutor General’s Office and on the basis of a court order, concerns the fraudulent appropriation of large amounts of money belonging to the state. Criminal proceedings have also been launched against seven additional individuals.

Tavberidze said more than 1,000 investigative and procedural actions had been conducted as part of the probe into the lawful spending of grant funds allocated by the Rural Development Agency of the Ministry of Environmental Protection and Agriculture.

Investigators have determined that members of an organised group gained access to information about 219 beneficiaries participating in the state programme State Programme of Dairy Modernisation and Market Access. They allegedly offered guaranteed grant approval and assistance with documentation in exchange for taking the grant money disbursed to the beneficiaries.

Of the more than ₾12.9 million ($4.75mln) allocated under the programme, only ₾8.8 million ($3.24mln) was spent on approved project activities, while about ₾4.1 million ($1.51mln) was illegally obtained by members of the scheme,Tavberidze said.

The group also secured an additional ₾1.56 million ($0.57mln) in grants under another state initiative - the co-financing programme for agricultural machinery and processing/storage facilities - and appropriated those funds as well. The scheme allegedly involved forged invoices, delivery documents and audit reports.

To legalise the illicit proceeds, suspects reportedly purchased real estate and vehicles registered in the names of associated individuals and entities. The assets have since been traced and seized.

In total, investigators have confirmed the fraudulent appropriation of ₾5.67 million ($2.09mln) and the laundering of ₾3 million ($1.11mln). Twenty-one individuals have been charged so far, including senior and former officials from the Rural Development Agency.

Authorities say the investigation is ongoing to identify additional participants in the organized group and determine the full extent of the financial damage to the state.

The offenses carry a potential sentence of nine to 12 years in prison.