Hungary carries out dawn raids over COVID-era purchase of 17,000 ventilators

Hungary Raids Reveal Fraud in COVID-Era Ventilator Procurement Worth $910M

Investigation into COVID-Era Medical Equipment Procurement

Background of the Raids

BUDAPEST, Oct 28 (Reuters) - Hungary's tax authority has raided several locations and made arrests in an investigation into COVID-era medical mask and ventilator procurement by the Foreign Ministry.

The raids, announced by the National Tax and Customs Administration late on Tuesday, came after an August 25 report filed with prosecutors by the ministry about suspected fraud in the 2020 purchase of nearly 17,000 ventilators worth a combined 300 billion forints ($910 million) under the previous government led by Viktor Orban. 

Foreign Ministry's Role and Statement

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 still stored in warehouses. 

Details of the Raids and Arrests

Locations and Suspects

On Tuesday, the tax agency carried out dawn raids at several locations and questioned 11 suspects, arresting one individual in Austria under a European Arrest Warrant and detaining two others. 

International Arrest Warrant

An international arrest warrant has also been issued for a suspected leader of the scheme, believed to be residing in Indonesia.

Nature of the Fraud

Procurement Agreements

According to the tax authority, the suspects had agreed in 2020 to supply 800 ventilators and 3 million medical masks from China for 15.6 billion forints ($47.31 million). 

Use of Shell Companies and VAT Fraud

The group is accused of using a network of shell companies with no real business operations and issuing fraudulent invoices to minimise their VAT obligations, resulting in a 660 million forint ($1.99 million) loss to the state budget.

Ongoing Investigations

Charges and Offences

The tax authority said it was investigating the case for budget fraud, money laundering and other offences. 

Separate Investigation by National Bureau

Separately, the National Bureau of Investigation is conducting its own proceedings relating to mismanagement, including overpricing and questions about the usability of the equipment.

Additional Information

($1 = 329.7200 forints)

(Reporting by Anita Komuves;Editing by Alison Williams)