European Public Prosecutor’s Office (EPPO) confirmed on Friday that they are investigating former minister Tomislav Tolusic and state administration employee Zeljko Ferenc for subsidy fraud and abuse of office and authority, and that they requested both to be put in pre-trial detention.

Tolusic, a former minister for EU funds and member of the ruling HDZ party, and Ferenc, an employee of a government agriculture agency were arrested in Virovitica on Thursday. Both were interviewed at EPPO headquarters in Zagreb.

Tolusic was EU funds minister in 2016 and later agriculture minister from 2016 to 2019 in the cabinets of current Prime Minister, Andrej Plenkovic. Tolusic also owns a family-run farm, and after leaving office, in early May 2020, he applied for a subsidy for winemaking equipment offered to farmers wishing to start their wineries. The funding, worth 4.65 million kuna (€620,000), with 85 percent of the funding co-financed by the EU.

It is alleged that in his application, Tolusic falsely stated several times that the financing of the project would be secured by a bank loan, and to that end, he submitted a letter of intent issued by a bank. However, he did not actually apply for a loan, nor did he intend to, but financed the project with money for which, in part, he could not prove lawful origin.

The EPPO went on to say that Tolusic also applied for another tender to fund the planting of vineyards. It is believed that in this  application, he falsely claimed that the plots of land intended to become vineyards already had vines planted on them. At Tolusic’s request, and despite the fact that the vines were already planted, Ferenc issued the certificate, allowing Tolusic to apply for financing.

However, Croatia’s agriculture ministry – the ministry Tolusic was formerly the head of – refused to approve the paperwork for the project he submitted, because “they gained knowledge about the already existing vines and had observed other irregularities and ambiguities,” state agency Hina said, without clarifying.

Tolusic then removed the planted vines, made a new project proposal, and attached it to the application for this tender. By doing this, he expected to receive a subsidy of 1.5 million kuna (€200,000), also 85-percent funded by the EU.

However, since the Agency for Payments, which oversees farming subsidies, found that Tolusic was not eligible for the program anyway, the subsidy was never paid out, the EPPO said.

(€1 = 7.52 kuna)