Zagreb (Croatia) | The European Public Prosecutor’s Office (EPPO) has filed an indictment against three individuals and a company in Croatia in a major subsidy fraud case involving approximately €2.5 million, equivalent to nearly ₹22.5 crore. The case pertains to alleged misuse of European Union Solidarity Fund (EUSF) money allocated for post-earthquake reconstruction and energy infrastructure restoration.
According to EPPO, the accused company and its owner, in collusion with two other individuals, allegedly submitted forged and manipulated documents to obtain public funds under an EU-backed recovery programme. The funds were intended to support rebuilding efforts after earthquakes that struck Croatia in December 2020, but were reportedly diverted through fraudulent claims.
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Investigators revealed that out of the total approved amount of €2.5 million (around ₹22.5 crore), nearly €1.7 million (approximately ₹15.3 crore) had already been disbursed to the company. These payments were made for works that were either not carried out or did not meet eligibility criteria under the funding guidelines.
EPPO stated that the fraud was executed using falsified technical documentation, with assistance from a construction expert and a licensed electrical engineer. These professionals allegedly helped validate incorrect project details, enabling the company to pass the scrutiny of the public tender process and secure EU funding.
As part of the ongoing investigation, authorities have also frozen assets worth around €1.5 million (approximately ₹13.5 crore) held in the company’s bank accounts. The move was taken to prevent further movement or concealment of suspected illegal proceeds and to secure potential recovery of misappropriated funds.
Officials confirmed that if the charges are proven in court, the accused could face up to 10 years of imprisonment under Croatian law. In addition to prison terms, the defendants may also face financial penalties and confiscation of assets linked to the alleged fraud.
The EPPO highlighted that this case is part of a broader crackdown on misuse of European Union funds across member states. In recent years, multiple subsidy fraud cases involving agriculture, infrastructure, and post-disaster reconstruction programmes have raised concerns about the effectiveness of oversight mechanisms within EU funding systems.
According to investigators, such fraud schemes typically involve forged invoices, inflated construction estimates, and fabricated project reports, allowing individuals and companies to unlawfully access public money. EPPO further stated that it is currently examining additional financial transactions and possible links to other individuals who may have played a role in the network.
Authorities believe that the case may not be an isolated incident but part of a wider pattern of organized financial crime targeting EU-funded projects. This has raised concerns about the vulnerability of large-scale public funding mechanisms to document-based fraud.
The investigation is ongoing, and EPPO has not ruled out further indictments or arrests as financial trails and documentary evidence are analysed in detail. Officials are continuing to trace the flow of funds to determine the full scale of the alleged fraud and identify all beneficiaries involved.
