Czech authorities arrested on Monday ten suspects linked to a multi-year corruption and money laundering conspiracy involving public contracts to procure medical supplies for the country’s hospitals.

Czech authorities arrested ten suspects linked to a corruption ring involving the fraudulent procurement of hospital equipment. (Photo: Nick Youngson, pix4free, License)Officers from the Czech National Centre against Organised Crime (NCOZ) carried out 36 searches across 11 cities as part of their investigation into the corruption ring. Amongst the arrested is a hospital’s general manager, managers of the public contracting authority, and directors of medical equipment supply companies.

Working in tandem with the European Public Prosecutor’s Office (EPPO), NCOZ has investigated the suspected organized crime group, active since at least 2022, that has systematically manipulated the country’s medical equipment supply chain.

Authorities allege that the accused specifically tailored public contracts for the benefit of select suppliers. These companies specialized in procuring expensive hospital equipment such as operating tables, defibrillators, surgical drills, and ventilators.

What’s more, the accused also “transmitted confidential information” concerning public contracts to their preferred suppliers, “including the content of the offers from competing suppliers” so that they could undercut the competition, EPPO alleged.

To facilitate the corruption ring, the medical equipment suppliers also allegedly paid bribes of roughly 10% of the contract’s worth to those working for the country’s contracting authority body. Intermediaries were believed to be used to obfuscate the dirty money trail.

As part of the money laundering process, authorities allege that the ring forged invoices for fictitious services in the name of associated companies. Once a phony paper trail was established, the bribes were subsequently distributed in cash amongst the corruption ring’s members, EPPO said.

The independent EU public prosecution office, responsible for prosecuting crimes against the financial interests of the EU, expects the accused to face trial for procurement fraud, corruption, participation in an organized criminal group and money laundering.

Authorities ballpark the damages in the one million euro (US$1.08 million) range. As the probe is ongoing, investigators expect that the final figure will be “considerably higher.”

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