Croatian Trio and Company Indicted for Subsidy Fraud and Document Forgery in EU-backed Loans

Luxembourg, June 25, 2024

The European Public Prosecutor’s Office (EPPO) in Zagreb has filed an indictment against three Croatian citizens and one company for subsidy fraud and document forgery. The defendants are accused of obtaining financial support for small and medium-sized enterprises (SMEs) by misrepresenting their eligibility and falsifying documents.

Investigation Reveals Fraudulent Activity

The investigation found that the individuals set up a chain of companies owned and managed by them to prove their eligibility for EU-backed loans from the European Regional Development Fund (ERDF). They presented:

• Fake investment plans
• Invoices for non-existent transactions
• Unreliable corporate balance sheets indicating a thriving business

Cash Flow Analysis Reveals Misuse of Loans

The analysis of the company’s cash flow revealed that the loans were not used for their intended purposes, but were instead withdrawn by the defendants within 24 hours of receipt.

Estimated Damage and Potential Consequences

The alleged fraudulent activity caused an estimated damage of €160,165.52, as the loans have not been returned and collection from insurance funds was impossible. If found guilty, the defendants could face prison sentences ranging from six months to ten years.

Importance of Transparency in EU-funded Projects

The EPPO is responsible for investigating, prosecuting, and bringing to judgment crimes against the European Union’s financial interests. This case highlights the importance of ensuring that EU-funded projects are carried out in a transparent and honest manner.