Croatia Hit by Fraudulent Activities in Finance: EPPO Launches Investigation Against Four Individuals and Company
Zagreb, March 28, 2024 - Investigation Launched Against Suspects
The European Public Prosecutor’s Office (EPPO) in Zagreb has initiated an investigation against four individuals and a company for alleged subsidy fraud and document forgery. Following investigative activities conducted in cooperation with the Međimurje County Police Administration, three of the suspects were arrested yesterday at the EPPO’s request.
Suspects Allegedly Committed Subsidy Fraud
According to the investigation, between 2019 and 2020, the suspects allegedly committed three instances of subsidy fraud. They used financial support from the European Structural and Investment Funds (ESIF) for small and medium-sized enterprises, specifically loans from the European Regional Development Fund (ERDF), including one to cover losses caused by Covid-19.
Methods Used to Commit Fraud
The investigation revealed that the individuals set up a chain of companies owned and operated by them, in order to prove their eligibility for financial support. They presented:
- Falsified investment plans
- Invoices for non-existent transactions
- Unreliable corporate balance sheets showing a thriving business
Analysis of the company’s cash flow showed that the disbursed loans were not used for their intended purposes, but instead withdrawn from the business accounts within 24 hours of receipt.
Estimated Damage and Consequences
The alleged fraudulent activity is believed to have caused an estimated damage of €197,281, as the loans have not been returned. The EPPO is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.
Significance for Croatia
This case highlights the need for increased vigilance in detecting and preventing fraudulent activities in the finance sector. As Croatia continues to rely on EU funding for its economic development, it is crucial that measures are taken to prevent such incidents from occurring in the future.
Preventing Future Incidents
To prevent similar cases from happening again, it is essential that:
- Stricter controls are implemented to verify the eligibility of companies receiving financial support
- Regular audits and monitoring are conducted to detect any irregularities
- Measures are taken to increase transparency and accountability within the finance sector