Attorney general weighs in on casino probe

The identity of foreign companies suspected of embezzlement of EU funds pumped into a casino project in Cyprus remains unknown, with the island’s legal department clarifying there is no evidence of local companies being involved in illegal activity.

According to a Legal Services department press release released on Friday, Attorney General Costas Clerides has received clarification from the European Anti-Fraud Office (OLAF) regarding a probe into alleged money fraud, after reports emerged that stolen money ended up as an investment into a casino project on the island.

“In his own letter, the Director-General of OLAF today clarified and confirmed that his Office did not come into any contact with any authorities in the Republic, due to the fact that none of the activities under investigation took place in Cyprus, or involved Cypriot citizens or Cypriot companies,” Legal said.

Following the completion of a probe in November 2019, unbeknownst to state authorities in Cyprus, the European auditors had asked national judicial authorities to initiate proceedings against individuals involved, leaving the island-nation out of the loop.

A consortium in Europe, consisting of five small and medium-sized enterprises based in France, Ireland, Romania, and Spain, was deemed by investigators not to have had operational capacity to carry out an environmental project, with OLAF saying the group ended up diverting EU funds into an unnamed hotel-casino project in Cyprus.

But Cyprus’ legal department says the funds were not used in Cyprus but instead were paid “for participation in the competitive tendering procedure for a construction permit of a casino hotel in Cyprus.”

“This participation in the tendering procedure did not materialize due to financial difficulties of the consortium that promoted it,” the statement said.

A 30-year casino licence was granted in 2017 to Integrated Casino Resorts Cyprus Ltd, allowing the single permit holder to build satellite casinos in addition to the main property, the City of Dreams Mediterranean scheduled to open in Limassol in late 2021.

A year earlier, two other bidders were shortlisted following the approval of new regulations but pulled out from the bidding process after reportedly failing to secure land deals, one in Paphos and the other in Larnaca.

Several other groups did not make the cut, with one accusing officials of leaking information and thus damaging the bidding process. Another consortium that was left out, which included the Trump Organization, cried foul denying reports that had suggested the consortium lacked backing to take on the project.

The island’s Legal department says the European funds that were absorbed according to the findings of the OLAF probe “were paid, as expenses of architectural and consulting projects outside Cyprus, for participation in the competitive tendering procedure for a construction permit of a casino hotel in Cyprus.”

But the attorney general’s office said they were never contacted by EU auditors “due to the fact that none of the activities under investigation took place in Cyprus, or involved Cypriot citizens or Cypriot companies.”

“Contacts were made with authorities in Ireland, Romania, Spain and France, and there was no evidence of criminal or fraudulent activity in Cyprus,” Legal added.