The European Public Prosecutor’s Office (EPPO) in Zagreb has initiated an investigation against three individuals and one company suspected of subsidy fraud and document forgery, to obtain a grant of approximately €2.5 million for earthquake repairs, financed by the EU Solidarity Fund (EUSF). All suspects were arrested on Monday, 29 April, at the request of the EPPO.

It is alleged that, between January 2022 and October 2023, one of the suspects – who is the owner of the company under investigation – committed subsidy fraud and document forgery. According to the evidence, he applied on behalf of his company to a public call by the Croatian Ministry of Economy and Sustainable Development. The purpose of the project was to restore the energy infrastructure, power plants, energy systems and related buildings damaged by the earthquakes that struck Croatia’s Sisak-Moslavina County on 28 and 29 December 2020.

In order for the application to be successful, the company owner needed to provide findings and opinions on the damage to the electric power infrastructure owned by the company. Proof of medium voltage cable testing needed to be provided and in general, it was important to show that an earthquake had caused the damage. 

According to the investigation, the company owner arranged the falsification of the requested documentation, which allegedly happened with the support of the two other suspects – a court expert for construction, and a certified electrical engineer. It is believed that they falsely stated that the electric power infrastructure had been damaged in the earthquake, and that the court expert for construction unjustifiably increased the cost for the restoration of the existing power network.

According to the evidence, the company owner submitted forged documents as attachments to his application to the Croatian Ministry of Economy and Sustainable Development, which granted him approximately €2.5 million from the EUSF – of which approximately €1.7 million was paid to his company for the costs that were in fact ineligible.

In order to secure the unlawfully acquired financial gain, the EPPO proposed to the investigating judge the blocking of assets and funds on the account of the suspected company.

The preliminary investigation activities were conducted in cooperation with Croatia’s National Police Office for Suppression of Corruption and Organised Crime (PNUSKOK) and the Croatian Tax Administration’s Independent Financial Investigation Sector.