Hungarian authorities have issued arrest warrants for two former executives, 48-year-old Gábor Kósa and 44-year-old Bálint Májer, in connection with a multi-billion-forint money laundering and tax evasion investigation linked to pandemic-era ventilator purchases, according to the MTI news agency. Investigators state that the entrepreneurial network laundered more than three billion forints and avoided 660 million forints in taxes following state procurement contracts established during the coronavirus outbreak in 2020.
Arrest Warrants Issued for Former Executives Kósa and Májer
The National Tax and Customs Administration (NAV) issued the arrest warrants on Tuesday for Gábor Kósa, chief executive of the liquidation-bound iSRV Zrt. and former strategic adviser to OTT-ONE Nyrt., alongside Bálint Májer, former CEO of the formerly stock-exchange-listed OTT-ONE. Financial investigators launched coordinated operations across multiple domestic locations and in Austria, seizing and freezing 1.5 billion forints in assets while interrogating 11 suspects and detaining two. Austrian authorities apprehended an additional suspect under a European arrest warrant, while a suspected organizer of the criminal network reportedly remains in Indonesia, prompting international arrest warrants.
Did You Know? The investigation centers on 2020 state acquisitions in which 800 ventilators and 3 million surgical masks arrived from China for a total of 15.6 billion forints, following contracts signed by OTT-ONE with the Ministry of Foreign Affairs and Trade for 4.7 billion net forints and the State Health Holding Center for 7.7 billion forints.
Suspects establish corporate network for fictional invoices
According to the Győr-Moson-Sopron County Chief Prosecutor’s Office, the suspects established a corporate network in 2020 utilizing nominal directors and non-operational companies, including a Győr-based firm, to issue fictional invoices for IT services. These fraudulent documents masked the true profits generated from the sale of medical equipment to state bodies and reduced value-added tax liabilities. The proceeds were funneled through the corporate network, partially withdrawn in cash domestically, and transferred to a company registered in the United Arab Emirates.
Investigators examine overpricing of medical devices
The current NAV investigation into money laundering and budgetary fraud runs parallel to probes conducted by the National Bureau of Investigation examining the overpricing and usability of the medical devices. The Ministry of Foreign Affairs and Trade, led at the time by Péter Szijjártó, purchased a total of 16,583 ventilators for approximately 300 billion forints in 2020, and the ministry filed a criminal complaint in late August over suspected disloyal management after audits revealed severe quality defects upon arrival. Separately, the National Bank of Hungary imposed a 111 million forint fine on OTT-ONE in January 2022 for prohibited market manipulation and disclosure violations before the company’s shares were suspended and it entered liquidation.
Authorities target firms linked to arrest warrants
What specific companies are involved in the current arrest warrants?
The authorities are targeting individuals linked to OTT-ONE Nyrt., a former Budapest Stock Exchange-listed firm, and iSRV Zrt., a liquidation-bound company that served as the domestic subsidiary of Polish-listed Polaris and assisted with Chinese sourcing connections.
How much financial damage and tax evasion are authorities investigating?
Investigators state that the criminal network laundered over three billion forints in profits, evaded 660 million forints in taxes, and caused budgetary damage while executing state medical procurement contracts valued at 15.6 billion forints, according to NAV and MTI disclosures.
Where are the key suspects currently located?
While two suspects were detained domestically and another was captured in Austria, a suspected organizer of the criminal organization is believed to be in Indonesia, where reports place Bálint Májer operating a 45-meter Ferris wheel in Canggu, Bali.
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