Prague's High Court on Monday confirmed the conviction of Jana Nagyová, a Member of the European Parliament for the Patriots for Europe group, for EU subsidy fraud amounting to €2 million. The court upheld a lower court ruling from May, sentencing the former adviser to Czech Prime Minister Andrej Babiš to a suspended three-year prison term with a five-year probation period and a fine of approximately €20,000. Nagyová's lawyer said she will appeal to the Czech Supreme Court.
The fraud scheme and Čapí Hnízdo
Prosecutors established that Nagyová helped orchestrate a scheme to separate Čapí Hnízdo, a recreational centre in central Czechia, from the Agrofert conglomerate. The purpose was to present the facility as an independent small- and medium-sized enterprise, thereby meeting EU grant criteria reserved for smaller businesses. Once the funding was secured, Agrofert reacquired ownership of the site. The European Anti-Fraud Office (OLAF) participated in the investigation alongside Czech authorities, reflecting the direct damage to the EU budget.
Political immunity and the split case
The judicial proceedings initially named both Nagyová and Babiš as defendants. In March, the Czech parliament voted against lifting the prime minister's immunity, forcing the municipal court to split the case. Proceedings against Babiš are now suspended for the duration of his mandate. He has consistently denied any wrongdoing. The decision to protect a sitting head of government from prosecution while his former aide faces conviction has drawn criticism from transparency campaigners and opposition politicians in Prague.
The trust fund that changed little
Babiš placed Agrofert into a trust fund when he returned as prime minister in December, stating that he no longer has any connection to the conglomerate he founded. Critics, including the European Commission in previous reports, have argued that the trust arrangement does not constitute a genuine blind trust and leaves the prime minister with effective control over a business empire that receives substantial EU and national subsidies. The Čapí Hnízdo case illustrates how corporate restructuring can be used to circumvent EU funding rules designed to prevent precisely such conflicts of interest.
OLAF and the European dimension
The involvement of OLAF underscores that this is not merely a domestic Czech matter. The office investigates fraud against the EU budget, and its participation signals that the misallocation of structural or agricultural funds affects the financial interests of the Union as a whole. The case also tests the EU's conditionality mechanisms, which link funding to respect for the rule of law. While the Czech Republic is not currently subject to the conditionality regulation, the conviction of a sitting MEP for defrauding EU programmes adds weight to arguments that enforcement must be consistent across member states.
Nagyová's political position
Nagyová sits in the European Parliament as part of the Patriots for Europe group, a formation that includes parties critical of EU centralisation and oversight. Her immunity was lifted by the Parliament in April, a procedural step that allowed Czech courts to proceed with the appeal hearing. The Parliament's decision was supported across political groups, reflecting a rare consensus that an MEP accused of defrauding the EU budget should not be shielded by parliamentary privilege. Nagyová has denied the charges throughout.
What the appeal means
The appeal to the Czech Supreme Court will focus on points of law rather than a re-examination of facts. The Supreme Court can uphold the conviction, order a retrial, or in rare instances quash the verdict. Until a final judgment is delivered, the suspended sentence and fine remain in place but are not enforced. The timeline is uncertain; Czech supreme court appeals typically take several months. Meanwhile, Nagyová retains her seat in the European Parliament unless a final conviction triggers further action under the Parliament's code of conduct.
Why this matters for EU funds and rule of law
The case exposes a structural vulnerability: when political leaders maintain de facto control over business empires that bid for EU money, the safeguards designed to prevent conflicts of interest can be circumvented through temporary corporate restructuring. The Čapí Hnízdo scheme was relatively simple, carve out an asset, claim it qualifies as an SME, collect the grant, fold it back in, yet it took years of investigation by both national prosecutors and OLAF to reach a first-instance verdict, and the prime minister himself remains beyond the reach of the courts for now.
People mentioned
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Jana Nagyová
Organisations
European Parliament · European Anti-Fraud Office (OLAF) · Agrofert · Patriots for Europe · Prague High Court · Czech Supreme Court
