Prosecutor drops charges against payday lender over failed mask deal

The aggravated fraud charges relate to a 4.9 million-euro deal to supply personal protective equipment (PPE) at the beginning of the coronavirus pandemic.

Former payday lender and businessman Onni Sarmaste. Image: Onni Sarmaste

Prosecutors have decided to drop charges of aggravated fraud against former payday lender and businessman Onni Sarmaste related to the supply of faulty personal protective equipment (PPE) at the beginning of the coronavirus pandemic.

Similar charges against Sarmaste's business partner were also dropped.

The National Emergency Supply Agency (Nesa) paid Sarmaste 4.9 million euros in April 2020 for a delivery of face masks from China to be used by healthcare workers.

Finland's VTT Technical Research Centre subsequently determined that the masks did not meet the standards for hospital use, with users reporting allergic reactions as well as a strange smell from the equipment. The amount of masks was also found to be fewer than promised.

The National Bureau of Investigation launched a pre-trial investigation on the suspicion that Sarmaste and his accomplice had deliberately misled NESA officials on matters that were decisive in making the purchase decision.

Charges against the three NESA officials — the agency's former Managing Director Tomi Lounema, former Administrative Director Asko Harjula and former Department Manager Jyrki Hakola — were dropped earlier this month.

All three left the agency following the fallout from the failed deal.

However, the prosecutor decided not to prosecute because there was no probable reason to suspect Sarmaste or his business partner of committing any crime, based on the outcome of the preliminary investigation.

In a statement released following the prosecutor's decision, NESA said it intends to review the ruling and assess possible further action. The agency further added that it will continue to demand payment of the transaction amount and other ancillary costs from Sarmaste, his company and his business partner.

Sarmaste previously operated an instant-loan company before running into heavy debt himself. He has a long criminal record including assault, making threats, resisting arrest and drunk driving.