EPPO Croatia: Mayor Arrested for RRF Funds Fraud

• The EPPO in Zagreb has initiated an investigation into four individuals and two companies for alleged abuse of office and authority.
• A Croatian mayor is suspected of orchestrating a scheme to benefit from a €349,818.83 EU-funded community center renovation project.
• The alleged fraud involved covering pre-existing works and services at family homes, using pre-arranged bids and false documentation.
• Unjustified payments of €104,284.81 were made to two companies, causing €83,594.70 damage to the RRF and €20,690.11 to the municipal budget.
• All four individuals were arrested on October 29, 2026, as part of the EPPO's ongoing efforts to protect EU financial interests.

The alleged Croatia RRF funds fraud mayor scheme inflicted significant financial damage, with the Recovery and Resilience Facility incurring losses of €83,594.70.

The European Public Prosecutor’s Office (EPPO) in Zagreb, Croatia, has launched an investigation into alleged abuse of office and authority, leading to the arrest of four individuals and implicating two companies. These arrests, carried out on October 29, 2026, followed EPPO's request, with the National Police Office for Suppression of Corruption and Organised Crime (PNUSKOK) executing urgent investigative measures. Among those apprehended is a mayor of a Croatian municipality, suspected of orchestrating a scheme to secure financial benefits for himself and others.

The core of the investigation centers on a €349,818.83 project initiated in 2025, aimed at renovating a community center and enhancing its energy efficiency. This project received substantial co-funding from the European Union, channeled through the Environmental Protection and Energy Efficiency Fund as part of Croatia's 2021–2026 National Recovery and Resilience Plan. The EU's financial contribution covered 80.16% of the project's eligible costs, drawing funds from the broader Recovery and Resilience Facility (RRF).

According to the ongoing EPPO Croatia RRF investigation, the municipal mayor allegedly arranged for the EU-funded project to cover expenses for work already completed at the community center by the two implicated companies. Furthermore, the scheme purportedly extended to include works performed at the private residences of the mayor's family members. To facilitate this, the companies are suspected of submitting pre-arranged bids, while a supervisory engineer, acting under the mayor's direction, incorporated the costs of these pre-existing and unrelated works into the project's official budget.

Following the selection of the pre-arranged bid, the suspects are accused of presenting false documentation to obtain payments for services that were not actually rendered under the energy renovation project. The supervisory engineer then allegedly verified these fraudulent documents, which resulted in unjustified payments totaling €104,284.81 being disbursed to the accounts of the two companies, thereby securing an unlawful financial gain for them.

The alleged Croatia RRF funds fraud mayor scheme inflicted significant financial damage, with the Recovery and Resilience Facility incurring losses of €83,594.70. Additionally, the municipal budget suffered damages amounting to at least €20,690.11. This case highlights the critical importance of protecting EU financial interests in member states like Croatia, particularly concerning large-scale funding initiatives such as the RRF.

The European Public Prosecutor’s Office operates as the independent public prosecution body of the European Union, tasked specifically with investigating, prosecuting, and bringing to judgment crimes that undermine the EU's financial interests. While the investigation proceeds, all individuals involved are presumed innocent until their guilt is established in the competent Croatian courts of law, underscoring the legal principle of due process.

This case underscores the European Public Prosecutor's Office's active enforcement against fraud involving EU Recovery and Resilience Facility funds in member states like Croatia. Lawyers and compliance officers advising entities engaged in EU-funded projects must ensure stringent internal controls, transparent procurement processes, and rigorous due diligence to mitigate risks of abuse of office and financial irregularities, as EPPO investigations can lead to significant legal consequences for individuals and companies.

Source: Original reporting via European Public Prosecutor's Office