Hungarian tax investigators have searched several locations and taken suspects into custody as part of an inquiry into medical equipment bought during the COVID-19 pandemic, the country’s tax authority has said. The searches, carried out in the early hours of Tuesday, form part of a widening examination of ventilator and mask purchases made in 2020, when governments across Europe were racing to secure life-saving equipment.
FAKTA
- Dawn raids: Tax officials searched several locations on Tuesday and questioned 11 suspects.
- Arrests: One person was arrested in Austria under a European Arrest Warrant and two others were detained. An international warrant has also been issued for a suspected leader of the scheme, believed to be living in Indonesia.
- Scale of the purchases: Nearly 17,000 ventilators bought in 2020 for a combined 300 billion forints, about $910 million.
- Contract under scrutiny: A deal for 800 ventilators and three million medical masks from China, worth 15.6 billion forints, about $47.31 million.
- Alleged loss: Investigators say the state budget lost 660 million forints, about $1.99 million, through the value-added tax arrangements under examination.
- Status: The allegations have not been proven in court, and the investigations are continuing.
How the case reached investigators
The latest enforcement action follows a report filed with prosecutors on August 25 by Hungary’s Foreign Ministry, which raised suspected fraud in the 2020 ventilator purchases. The purchases were made under the previous government led by Viktor Orban.
Foreign Minister Anita Orban said at the time that the ministry had bought thousands of surplus ventilators at inflated prices that could not realistically be used, with most of the devices still stored in warehouses. She is not related to the former prime minister. The ministry’s internal review, she said, pointed to possible serious financial misconduct, and prosecutors were asked to examine the material.
What investigators are examining
According to the tax authority, the suspects agreed in 2020 to supply the ventilators and masks from China. Investigators allege that the group used a network of shell companies with no genuine business operations and issued fraudulent invoices to reduce their value-added tax obligations.
The tax authority said it is investigating suspected budget fraud, money laundering and other possible offences. Officers are examining company records, invoices and other evidence to establish how the transactions were arranged and whether public money was misused during a period of urgent medical demand.
Two inquiries now under way
Separately, Hungary’s National Bureau of Investigation is conducting its own proceedings relating to possible mismanagement of the procurement process, including concerns about inflated prices and whether the equipment was suitable for use.
The case has renewed attention on emergency pandemic spending, when normal purchasing timetables were compressed and countries competed for limited supplies. Officials have not announced a final outcome, and further investigative steps could follow as the evidence is examined and the money trail is traced.
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