It was Hungary’s Minister of Foreign Affairs, Péter Szijjártó who signed a document specifying a claim of 288 million forints plus interest against a company under liquidation. The company in question is involved in one of recent years’ largest fraudulent invoice scandals – according to the information received by 24.hu.
We previously reported on the case of Top Hygiene Ltd., a company that went into liquidation shortly after receiving the mentioned 288 million forints of non-refundable support from the Ministry of Foreign Affairs and Trade. The grant was issued to counter the adverse effects of the coronavirus pandemic, for the purpose of increasing competitiveness.
However, the company’s circumstances could have raised suspicions already during the application process. To begin with, the company employing a staff of 174 (on paper) at the time of applying was registered in the basement of a family house in Zugló (Budapest’s District 14). Furthermore, the company had already violated the terms of application at the time the decision was made. Among the requirements announced by the Ministry, it was specified that applicants must maintain the average number of employees of the year prior to the application until the completion of the investment to be supported. At the time of Top Hygiene Ltd.’s application in November 2020, the company claimed to employ 174 people, but when the decision to issue the grant was made in February 2021, they only had nine employees left. Meaning that in just a few months, over 90% of employees were laid off by the company, right before claiming the grant exceeding a quarter billion.
The competitive call for proposals was administered by the Hungarian Investment Promotion Agency Non-profit Plc. (HIPA) on behalf of the Ministry of Foreign Affairs and Trade, the exerciser of ownership rights. According to the call’s terms, the agency had 60 days to complete the transfer after signing the support agreement. However, in the case of Top Hygiene Ltd., HIPA
Four months later, the National Tax and Customs Administration’s (NAV) Crime Directorate of Western Transdanubia (Hungary’s westernmost region) placed the company’s physical assets under lockdown, with the prospect of subsequent confiscation. Enforcement measures were taken shortly thereafter, leading to liquidation proceedings. In the latter proceedings, the Ministry of Foreign Affairs withdrew the support agreement and announced its claim of 293 million forints (the original amount plus interest) to the liquidator. Since then, as asserted by Chief Prosecutor Péter Polt in a reply to independent MP Ákos Hadházy, there is an ongoing investigation regarding the case of state support.
The aforementioned asset lockdown on Top Hygiene Ltd. was the culmination of an investigation process reaching back to 2019, as it was revealed that the company was involved in one of the largest invoice fabrication frauds in recent years. The perpetrators were raided by authorities in the summer of 2021 across eighty locations. According to the charges, the ‘invoice factory’, comprising over thirty companies, had cheated itself out of VAT obligations on 19 billion forints. The fraud was perpetrated via fabricated invoices issued for cleaning and IT services that were never actually provided. In the large-scale operation, the National Tax and Customs Administration (NAV) froze assets totalling 3.2 billion forints, including bank accounts, real estate, high-value vehicles, stocks, as well as cash, to cover budgetary losses. NAV had informed the Ministry of Foreign Affairs about the investigation and, according to a letter dated April 2022, inquired whether the 288 million forints had been transferred to Top Hygiene Ltd. The tax authority also recommended that the ministry conduct its own investigation.
The former CEO of Top Hygiene Kft. was questioned by investigators as a suspect, but defendant Tibor K. is currently at liberty. Our attempts to contact the CEO via phone resulted in either unanswered calls or automated messages indicating a switched-off phone.
The mentioned criminal investigation is linked to a larger case that involves, among others, T-Systems Hungary Ltd., and government-affiliated 4iG Inc., which has recently acquired Vodafone Hungary. The case also involves Antenna Hungária Plc., and Sys IT Services Ltd., widely known as the IT service provider of the Budapest Transport Company (BKV). Most of the suspects held in detention were connected to these companies. This is also where ex-convict Zsolt Fuzik, whose name has become synonymous with the invoice factory, came into the picture. Earlier, Fuzik had been the IT director at Axel Springer; BKV; and, during the fraud, supermarket chain CBA.
The case is also abundant in political implications. According to 444.hu, the threads lead as far as the circles of Minister of Interior Sándor Pintér, as a day before the NAV raids were conducted, Pintér’s confidant László Tasnádi had acquired ownership of the company operating BKV’s IT systems. However, investigators focused more on those on the left wing of the spectrum, especially with regards to the 2022 parliamentary election campaign. This was because Fuzik, through a plea bargain, implicated several MSZP (Hungarian Socialist Party) politicians, claiming to have bribed them in various deals. Based on Fuzik’s testimony, Zugló’s MSZP mayor Csaba Horváth, and Zugló’s former MP Csaba Tóth, who allegedly accepted 280 million HUF in bribes, were both placed under suspicion. They were interrogated in connection with corruption related to the paid parking system in Zugló. While the latter alleged misconduct was independent of the invoice factory’s activities, both personal and corporate overlaps could be found between the two.
The father of one of Hungary’s richest people, Dániel Jellinek, also came under suspicion in connection with the case of the invoice factory.
