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The Health Ministry's spokeswoman Gita Gzibovska told LETA that on Tuesday officers of the Riga Criminal Police raided several IT companies and related persons' homes as part of the criminal investigation launched on September 30, 2019. 

The criminal probe concerns allegedly fraudulent activities, including the supplying of inadequate Owitech software to the Health Ministry and other state institutions, which has reportedly resulted in a EUR 204,458 loss to the government budget. Police representatives said, however, that the exact size of the loss has yet to be specified. 

During the searches, police seized documents and a number of data carriers containing significant evidence, Gzibovska said. 

Criminal proceedings have been started against five persons in connection with the probe.

As reported, the criminal process was started in October 2019 based on the Health Ministry's application. Health Minister Ilze Vinkele (For Development/For) informed about the probe on Twitter. The suspected fraud involves Owitech licenses in the Health Ministry's ICT centralization project. Vinkele said 

Last summer LETA reported that the Health Ministry had alerted law enforcement authorities to possible fraud in its two recent ICT projects. 

Vinkele said at that time that already before taking office as health minister, she received information from multiple sources that the Health Ministry’s ICT projects were strongly politically influenced and that they were managed through the minister’s political office instead of relying on the ministry’s staff.

One of the projects in question involved the creation of a state health insurance database necessary for the launch of the so-called two-basket healthcare system. This project was allocated EUR 1.852 million worth of budget funds. The other project provided for the centralization of the ministry’s ICT system and its budget was planned at EUR 3.5 million.

Vinkele said she had ordered two audits in these projects. Experts examining the database project, discovered questionable purchases of equipment for EUR 315,000 at the end of 2018. The examination of the ICT centralization project revealed suspicious transactions worth nearly EUR 600,000.

The examination of these projects revealed that the software licenses purchased as part of these projects were much costlier and different from the ones needed for the aforementioned purposes. Moreover, the licenses could not be physically identified.

Vinkele also alleged that competition in both tenders had been restricted and the procurement rules had apparently been adjusted to particular suppliers.

The health ministry said that information at her disposal suggests of a scheme that has been used for the past couple of years, allowing certain companies to provide unlicensed ICT services to the ministry.

Considering these circumstances, the Health Ministry will organize two internal inquiries to assess and revise its ICT procurement policy and consider terminating the concluded contracts and reclaiming money from the suspicious suppliers.

Vinkele indicated that both ICT tenders were held in the Electronic Procurement System (EIS), which had been intended as a useful and convenient digital tool but was eventually used to cripple competition.