EU fraud squad vows to recover stolen £1bn

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Five whistleblowers are helping EU anti-fraud investigators to recover more than €1.5bn (£1bn) of public money, an official report will say today.

The document reveals a host of crimes, including a development programme in Lesotho in which €3m in bribes changed hands, a €10m fraud in the UK over flax subsidies and a €2.5m fiddle involving Chinese shrimp imports.

The fifth annual report on the work of the European anti-fraud office, Olaf, covers the period from 1 July 2003 to 31 June 2004. In that time cases registered in the system increased by 9 per cent from 585 to 637.

Olaf's 287 staff and 100 external advisers help investigate suspected fraud inside the EU institutions and in member states or third countries where EU cash is at stake.

They scored a striking victory over contraband cigarettes, with Philip Morris International agreeing to pay $1.25bn (£662m) over 12 years to help fight smuggling. Internal inquiries were launched in most European institutions with 24 new investigations opened.

The document does not identify sources but says: "At the end of the reporting period, Olaf had five active cases where the primary source of information was a whistleblower."

Among 64 active cases in the UK, 10 involve agriculture, 13 cigarette imports and eight the abuse of EU structural aid.