The Hungarian tax authority are investigating a possible defrauding of EU funds which could result in Hungary having to repay HUF 1.5 billion (€4,65 million) to the European Union. The scheme is a typical example of how EU funds are misused in Hungary.

In 2015 a consortium won contracts for the implementation of two EU-backed projects worth €20 million, one for the construction of a biogas and natural gas liquefaction plant and the corresponding distribution system, as well as the construction of a gas station network. The consortium was headed by Mr Henrik Domanovszky, who also holds shares in two of the three participating companies.

The consortium received an advance payment of €4.9 million for the two projects, and even though they were busy spending that money, the project did not really seem to lift off the ground ever since. Turns out, the leaders of the consortium were misusing the funds in quite a spectacular manner.

A great part of the money ended up at Mr Domanovszky himself. He and his daughter Andrea withdrew millions of forints from the advance on a monthly basis utilizing dubious assignment contracts. Domanovszky sometimes took HUF 4 to 5 million (€13-15,000) on a monthly basis, while his daughter once received HUF 8.8 million for project management. She also regularly used the company's credit card to buy clothes, groceries, and beauty products and did not refrain from actual cash withdrawals either. A company owned by Domanovszky rented a Mercedes Benz V-Klasse luxury van for €1900 a month for 3 years, an expense later deemed entirely unnecessary.

Of course, the old methods for syphoning money were also at play, evidenced by the consortium's order of liquefaction equipment from a Singaporean company for nearly 8 million Euros, which the Singaporean company just purchased from a Polish company for a tenth of the price. The Singaporean company was only registered twenty days after the consortium received the transfer of the advance payment and appears to be closely linked to a member of the consortium. Domanovszky also used securities backed by fictitious know-how about gas liquefaction to increase the value of his company.